Question

The year-end adjusted trial balance of the Timmons Tool and Die Corporation included the following account balances: retained earnings, $265,000; sales revenue, $880,000; cost of goods sold, $580,000; salaries expense, $155,000; rent expense, $49,000; and interest expense, $24,000.1.Close the revenue accounts as necessary2.Close the expense accounts as necessary3.Close net income

Answer 1

Year end Closing journal Entries:

Dr. Cr.

1.

Sales revenue $880,000

Income Summary $880,000

2.

Income Summary $808,000

Cost of goods sold $580,000

Salaries expense $155,000

Rent expense $49,000

Interest expense $24,000

Retained earning is an equity account and it is also a permanent account which will not close.