Question

Presented below are selected account balances for Tamarisk Co. as of December 31, 2017.

Inventory 12/31/17 $60,050
Cost of Goods Sold $229,610
Common Stock 74,370
Selling Expenses 15,940
Retained Earnings 45,010
Administrative Expenses 37,625
Dividends 17,920
Income Tax Expense 29,930
Sales Returns and Allowances 12,116
Sales Discounts 14,740
Sales Revenue 410,200
Prepare closing entries for Tamarisk Co. on December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)
No.
Account Titles and Explanation
Debit
Credit
1. (To close accounts with credit balances)
2. (To close accounts with debit balances)
3. (To close net income / (loss))
4. (To close dividends)

Answer 1

No. Account Titles and Explanation Debit Credit

1 Sales Revenue $410,200

Income Summary $410,200

(To close accounts with credit balances)

2. Income Summary $339,961

Sales return & Allowance $12,116

Sales Discounts $14,740

Cost of Goods Sold $229,610

Selling Expense $15,940

Administrative expense $37,625

Income tax expense $29,930

(To close accounts with debit balances)

3. Income Summary $70,239

Retained Earnings $70,239

(To close net income / (loss))

4. Retained Earnings $17,920

Dividends $17,920

(To close dividends)