Question

Presented below are selected account balances for Homer Winslow Co. as of December 31, 2014.Inventory 12/31/14 $60,180 Cost of Goods Sold $225,870Common Stock 75,870 Selling Expenses 17,400Retained Earnings 48,850 Administrative Expenses 39,150Dividends 19,080 Income Tax Expense 30,180Sales Returns and Allowances 13,650 Sales Discounts 15,290 Sales Revenue 411,940 Prepare closing entries for Homer Winslow Co. on December 31, 2014. (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 $411,940

To Income Summary $411,940

(Being revenue account closed)

2. Income summary A/c Dr $341,540

To Cost of Goods Sold $225,870

To Sales Returns and Allowances $13,650

To Sales Discounts $15,290

To Selling Expenses $17,400

To Administrative Expenses $39,150

To Income Tax Expense $30,180

(Being expenses accounts are closed)

3. Income summary A/c Dr $70,400 ( $411,940 - $225,870)

To Retained earning $70,400

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $19,080

To Dividend A/c $19,080

(Being dividend account is closed)