Question

The ledger of Mai Company includes the following accounts with normal balances: D. Mai, Capital $9,500; D. Mai, Withdrawals $1,050; Services Revenue $18,000; Wages Expense $10,900; and Rent Expense $2,600. Prepare the necessary closing entries from the available information at December 31. g

Answer 1

The closing entries are shown below:

Step-by-step explanation:

The closing entry for the following accounts are given below:

1. Service Revenue A/c Dr $18,000

To Income Summary $18,000

(Being revenue account closed)

2. Income summary A/c Dr $13,500

To Wages Expense $10,900

To Rent Expense $2,600

(Being expenses accounts are closed)

3. Income summary A/c Dr $4,500 ($18,000 - $13,500)

To Retained earning $4,500

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $1,050

To D. Mai, Withdrawals $1,050

(Being withdrawal account is closed)