Question

Closing entries

The year-end adjusted trial balance of the Timmons Tool and Die Corporation included the following account balances: retained earnings, $220,000; sales revenue, $850,000; cost of goods sold, $580,000; salaries expense, $180,000; rent expense, $40,000; and interest expense, $15,000. Prepare the necessary closing entries.

Answer 1

Please refer to the below

Step-by-step explanation:

The necessary closing entries are!

Sales revenue Dr $850,000

Income summary Cr. $850,000

(To close revenue account)

Income summary Dr. $815,000

Cost of goods sold. Cr. $580,000

Salaries. Cr $180,000

Rent expense. Cr $40,000

Interest expense. . Cr $15,000

(To close expense account)

Retained earnings Dr. $220,000

Dividend Cr. $220,000

(To close dividend account)

Income summary. Dr. $35,000

Retained earnings. Cr. $35,000

(To close net income account)