Question

Presented below is income statement information of the Schefter Corporation for the year ended December 31, 2021. Sales revenue $ 528,000 Salaries expense 87,800 Interest revenue 7,200 Advertising expense 12,000 Gain on sale of investments 9,800 Cost of goods sold 290,400 Insurance expense 15,200 Interest expense 4,100 Income tax expense 44,000 Depreciation expense 26,000 Required: Prepare the necessary closing entries at December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1

Step-by-step explanation:

The closing entry for the following accounts are shown below:

1. Sales Revenue A/c Dr $528,000

Interest revenue A/c Dr $7,200

Gain on sale of investments Dr $9,800

To Income Summary $545,000

(Being revenue account closed)

2. Income summary A/c Dr $479,500

To Salaries Expense $87,800

To Advertising Expense $12,000

To Cost of goods sold $290,400

To Insurance expense $15,200

To Interest expense $4,100

To Income tax expense $44,000

To Depreciation expense 26,000

(Being expenses accounts are closed)

3. Income summary A/c Dr $65,500

To Retained earning $65,500

(Being the difference is credited to retained earning)