Affordable Trailer Rental rents small trailers by the day for local moving jobs.
This is its adjusted trial balance at the end of the current fiscal year:
Affordable Trailer Rental Adjusted Trial Balance June 30, 2011
Cash $ 692
Accounts Receivable 972
Supplies 119
Prepaid Insurance 360
Trailers 12,000
Accumulated Depreciation Trailers $7,200
Accounts Payable 271
Wages Payable 200
A. Tropp, Capital 5,694
A. Tropp, Withdrawals 7,200
Trailer Rentals Revenue 45,546
Wages Expense 23,400
Insurance Expense 720
Supplies Expense 266
Depreciation Expense Trailers 2,400
Other Expenses 10,782
$58,911 $58,911
Required
1. From the information given, record closing entries in journal form.
2. If closing entries were not prepared at the end of the accounting period, what problems would result in the next accounting period?