Question

Closing Entries (Net Income)

The work sheet for Major Advising for the month ended January 31, 20-- is shown.

Major Advising Work Sheet (Partial) For Month Ended January 31, 20--
	Income Statement		Balance Sheet
ACCOUNT TITLE	DEBIT	CREDIT	DEBIT	CREDIT
Cash			450.00
Accounts Receivable			950.00
Supplies			344.00
Prepaid Insurance			800.00
Office Equipment			3,500.00
Accum. Depr.—Office Equipment				210.00
Accounts Payable				990.00
Wages Payable				310.00
Ed Major, Capital				4,000.00
Ed Major, Drawing			850.00
Advising Fees		3,400.00
Wages Expense	650.00
Advertising Expense	100.00
Rent Expense	600.00
Supplies Expense	170.00
Phone Expense	78.00
Electricity Expense	43.00
Insurance Expense	97.00
Gas and Oil Expense	50.00
Depr. Expense—Office Equipment	210.00
Miscellaneous Expense	18.00
	2,016.00	3,400.00	6,894.00	5,510.00
Net Income	1,384.00			1,384.00
	3,400.00	3,400.00	6,894.00	6,894.00

1. Enter the existing balance for each T account. Select Bal. and enter the amount.

3. Post the closing entries to the T accounts. If there is more than one closing entry for an account, enter in the order given in the journal.

Cash			101

Accounts Receivable			122

Supplies			141

Prepaid Insurance			145

Office Equipment			181

Accum. Depr.—Office Equip.			181.1

Accounts Payable			202

Wages Payable			219

Ed Major, Capital			311

Ed Major, Drawing			312

Income Summary			313

Advising Fees			401

Wages Expense			511

Advertising Expense			512

Rent Expense			521

Supplies Expense			524

Phone Expense			525

Electricity Expense			533

Insurance Expense			535

Gas and Oil Expense			538

Depr. Exp.—Office Equip.			541

Miscellaneous Expense			549

2. Prepare closing entries in general journal form. Then post the closing entries to the T accounts.

Page: 1

	DATE	DESCRIPTION		POST. REF.	DEBIT	CREDIT
1	20-- Jan. 31	Advising Fees					1
2		Income Summary					2
3							3
4	Jan. 31	Income Summary					4
5		Wages Expense					5
6		Advertising Expense					6
7		Rent Expense					7
8		Supplies Expense					8
9		Phone Expense					9
10		Electricity Expense					10
11		Insurance Expense					11
12		Gas and Oil Expense					12
13		Depreciation Expense-Office Equipment					13
14		Miscellaneous Expense					14
15							15
16	Jan. 31	Income Summary					16
17		Ed Major, Capital					17
18							18
19	Jan. 31	Ed Major, Capital					19
20		Ed Major, Drawing					20
21							21

Answer 1

The T - Accounts: