Question

The ledger of Mai Company includes the following accounts with normal balances as of December 31: D. Mai, Capital $10,800; D. Mai, Withdrawals $1,700; Services Revenue $31,000; Wages Expense $17,400; and Rent Expense $5,200. Prepare its December 31 closing entries.

Answer 1

End of the year closing capital balance will be = $17,500 (CR)

Step-by-step explanation:

Income Statement

$

Services Revenue $31,000

Wages Expenses ( $17,400)

Rent Expenses ( $5,200)

Profit $8400

In summary , end of the year closing capital balance will be :

$10,800 (Capital as given) + $ 8400 (Retained Earning)-$1,700( drawings)

=$17,500

Entries include :

Capital Account (CR) $10,800, Drawings Account(DR) $1,700, Director's Current Account (CR) $1700, Cash or Bank (CR) $1700

Retained Earning (CR) $ 8400