Question

a company had a revenue of 550,000, rent expense of 100,000, utility expense of 10,000, salary expense of 125,000, depreciation expense of 39,000, advertising expense of 40,200, dividends in the amount of 183,000 and an ending balance in retained earnings of 402,300what is the appropriate journal entry for income summary?

Answer 1

Step-by-step explanation:

The closing entries for the following accounts are shown below:

1. Service Revenue A/c Dr $550,000

To Income Summary $550,000

(Being revenue account closed)

2. Income summary A/c Dr $314,200

To Depreciation Expense $39,000

To Salaries expense $125,000

To Utilities Expense $10,000

To Rent Expense $100,000

To Advertising expense $40,200

(Being expenses accounts are closed)

3. Income summary A/c Dr $235,800 ($550,000 - $314,200)

To Retained earning $235,800

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $183,000

To Dividend A/c $183,000

(Being dividend account is closed)