Question

The trial balance of Optique Boutique at December 31 shows Inventory $ 21,000, Sales Revenue S 156.000, Sales Returns and Allowances $4,000, Sales Discounts $3,000, Cost of Goods Sold $ 92.400, Interest Revenue $5.000, Freight-Out $1.500 Utilities Expense 57.400, and Salaries and Wages Expense $ 19,500

Prepare the closing entries for Optique Boutique for these accounts.

Answer 1

To prepare the closing entries for Optique Boutique, follow these steps: close sales-related accounts, close the Income Summary account, close expense-related accounts.

Step-by-step explanation:

The closing entries for Optique Boutique will involve transferring the balances of the temporary accounts to the permanent accounts and closing them out. Here are the steps to prepare the closing entries:

1. Close the Sales Revenue, Sales Returns and Allowances, and Sales Discounts accounts by debiting them and crediting the Income Summary account.
2. Close the Income Summary account by debiting it and crediting the Cost of Goods Sold, Interest Revenue, Freight-Out, Utilities Expense, and Salaries and Wages Expense accounts.
3. Close the Cost of Goods Sold, Interest Revenue, Freight-Out, Utilities Expense, and Salaries and Wages Expense accounts by debiting them and crediting the Income Summary account.

By following these steps, Optique Boutique will have properly closed out their temporary accounts and prepared them for the next accounting period.