Question

The ledger of Mai Company includes the following accounts with normal balances: Common Stock $9,000;

Dividends $800;
Services Revenue $13,000;
Wages Expense $8,400;
Rent Expense $1,600.
Prepare the necessary closing entries from the available information at December 31.

Answer 1

Answer: Please see explanation for answer

Step-by-step explanation:

Journal to close Revenue account

Date Accounts and explanation Debit Credit

31 December Service Revenue $13,000

Income Summary $13,000

Journal to close expense account

Date Accounts and explanation Debit Credit

31 December Income Summary $10,000

Wages Expenses $8,400

Rent expenses $1,600

Journal to close Income Summary account

Date Accounts and explanation Debit Credit

31 December Income Summary $3,000

Retained earnings $3,000

Calculation

Retained Earnings =Services Revenue- (wages expense + rent expense)

$13,000 -$10,000-= $3,000

Journal to close Dividend account

Date Accounts and explanation Debit Credit

31 December Retained earnings $800

Dividends $800