Question

The company's adjusted trial balance includes the following account balances cash is 15000 equipment is 85000 accumulated depreciation is 25,000 accounts payable is 10,000 retained earnings is 59,000 dividends is 2,000 fees earned is 56000 depreciation expense is $25,000 in salaries expenses 23,000 all accounts have normal balances

Answer 1

Answer and Explanation:

The closing entries for the following accounts are:

1. Fees earned A/c Dr $56,000

To Income Summary $56,000

(To record the closing of the revenue account)

2. Income summary A/c Dr $48,000

To Depreciation Expense $25,000

To Salaries Expense $23,000

(To record the closing of the expenses accounts)

3. Income summary A/c Dr $8,000 ($56,000 - $48,000)

To Retained earning $8,000

(To record the difference i.e. credited to retained earning)

4. Retained earnings A/c Dr $2,000

To Dividend A/c $2,000

(To record the closing of the dividend account)