Question

Sunland has year-end account balances of Sales Revenue $744,020, Interest Revenue $13,110, Cost of Goods Sold $513,065, Administrative Expenses $202,210, Income Tax Expense $32,779, and Dividends $20,221. Prepare the year-end closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Answer 1

Step-by-step explanation:

The closing entry for the following accounts are shown below:

1. Sales Revenue A/c Dr $744,020

Interest revenue A/c Dr $13,110

To Income Summary $757,130

(Being revenue account closed)

2. Income summary A/c Dr $748,054

To Cost of Goods Sold $513,065

To Administrative Expenses $202,210

To Income Tax Expense $32,779

(Being expenses accounts are closed)

3. Income summary A/c Dr $9,076 ($757,130 - $748,054)

To Retained earning $9,076 ($757,130 - $748,054)

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $20,221

To Dividend A/c $20,221

(Being dividend account is closed)