Question

Sunland Consulting has year-end account balances of Sales Revenue $537,400, Interest Revenue $2,800, Salary and Wages Expense $240,200, Rent Expense $135,000, Administrative Expense $69,500, Income Tax Expense $37,600, and Dividends $34,200. Prepare the year-end closing entries. (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.)

Answer 1

Dr. Sales Revenue $537,400

Dr. Interest Revenue $2,800

Cr. Income Summary $540,200

Dr. Income Summary $482,300

Cr. Salary and Wages Expense $240,200

Cr. Rent Expense $135,000

Cr. Administrative Expense $69,500

Cr. Income Tax Expense $37,600

Dr. Retained Earning $34,200

Cr. Dividends $34,200

Step-by-step explanation:

All the revenue and Expenses account are closed in Income summary account. The revenue accounts have credit nature, to adjust these account we need to debit these account by the outstanding balances. The expense accounts have debit nature, to adjust these account we need to credit these account by the outstanding balances.

Balance in the Income summary account after posting all adjustments is transferred to owner's capital account.