Answer:
Explanation:
Here is the solution:
December 31, Closing Entries:
Close revenue accounts to Income Summary:
Debit: Service Revenue $80,000
Credit: Income Summary $80,000
Close expense accounts to Income Summary:
Debit: Income Summary $54,000
Credit: Salaries Expense $30,000
Credit: Rent Expense $18,000
Credit: Utilities Expense $6,000
Close Income Summary to Retained Earnings:
Debit: Income Summary $26,000
Credit: Retained Earnings $26,000
Post-closing Trial Balance:
Account Debit Credit $
Cash $18,000
Accounts Receivable $5,000
Prepaid Rent 1,200
Supplies 2,800
Equipment 32,000
Accumulated Depreciation 5,000
Accounts Payable 4,000
Salaries Payable 1,500
Common Stock 20,000
Retained Earnings 43,100
Service Revenue 80,000
Salaries Expense 30,000
Rent Expense 18,000
Utilities Expense 6,000
Income Summary $26,000
The post-closing trial balance shows that all temporary accounts have been closed and the only accounts with balances are permanent accounts, such as Cash, Equipment, and Accounts Payable. The Retained Earnings balance is now updated to reflect the net income for the period.