Question

The f. mercury, capital account has a credit balance of $37,000 before closing entries are made. total revenues for the period are $55,200, total expenses are $39,800, and withdrawals are $9,000. what is the correct closing entry for the expense accounts

Answer 1

The correct closing entry for expenses is to debit the Income Summary account and credit the respective expense accounts by the total amount of expenses, $39,800.

Step-by-step explanation:

The correct closing entry for the expense accounts, given that the total expenses for the period are $39,800, involves debiting the Income Summary account and crediting all the individual expense accounts to reduce their balances to zero in preparation for the next accounting period.

The journal entry would look something like this:

• Date: XYZ
• Income Summary 39,800
• Various Expense Accounts (such as Rent Expense, Salaries Expense, etc.) 39,800

Note that in practice, each expense would be listed individually on the credit side. This closes the expense accounts to the Income Summary, which will then be used to close to the owner's capital or retained earnings.

Answer 2

The $55,200 would have to be added to the $37,000 = $99,200-39,800=$52,400-$9000=$43,400 closing entry I would say  since one must add the revenues to the credit balance, subtract the expenses and then subtract the withdrawals since they are no longer in the account to get the final result.