Question

Sarasota has year-end account balances of Sales

Revenue $822,958,
Interest Revenue $12,180,
Cost of Goods Sold $509,030,
Administrative Expenses $183,720,
Income Tax Expense $36,026, and Dividends $18,372.
Prepare the year-end closing entries.

Answer 1

(A)

income summary 728,776‬

cost of goods sold 509,030

adminsitrative expenses 183,720

income tax expense 36,026

to record close of expense account

(B)

revenues 822,958

income summary 822,958

to record close of revenues account

(C)

income summary 18,372

dividends 18,372

to record close of dividends account

(D)

income summary 75,810

retained earnings 75,810

to record close of income summary to retained earnings

Step-by-step explanation:

(A)

expenses normal balance is debit, to close them, we credit them

(B)

revenues normal balance is credit, to closethem, we debit it.

(C) dividends normal balance is debit, we credit in order to close it.

(D) to close incom summary we will calcualte their balance:

debit for 728,776

debit for 18,732

credit for 822,598

balance 18,372 credit

to close we will debit against retained earnings.