Question

Use EMBG's adjusted trial balance to prepare entries to close EMBG's temporary accounts (using Retained Earnings), in journal entry form.

EMBG CORPORATION
Adjusted Trial Balance
For the Year Ending December 31, 2016
Debit Credit
Cash $44,000
Accounts receivable 28,000
Equipment 376,000
Accumulated depreciation $72,000
Notes payable 60,000
Common stock 130,000
Retained earnings 62,000
Service fees earned 326,000
Rent expense 44,000
Salaries expense 116,000
Depreciation expense 42,000
Totals $650,000 $650,000

Answer 1

Answer and Explanation:

The Preparation of entries to close EMBG's temporary accounts (using Retained Earnings), in the journal entry form is shown below:-

Service fees earned Dr, $326,000

To Income summary $326,000

(Being closing of service revenue is recorded)

Income summary Dr, $202,000

To Rent expense $44,000

To Salaries expense $116,000

To Depreciation expense $42,000

(Being closing of expenses is recorded)

Income summary Dr, $124,000 ($326,000 - $202,000)

To Retained earnings $124,000

(Being income is recorded)