Question

Exercise 6.6. The ledger accounts of I-Cloud Internet Company appear as follows on March 31, 2016:

Account No.	Account	Balance
101	Cash	$80,000
111	Accounts Receivable	$58.820
121	Supplies	$10,600
131	Prepaid Insurance	$25,000
141	Equipment	$118,000
142	Accumulated Depreciation – Equipment	$41,320
202	Accounts Payable	$13,000
301	Lee Retha Hale, Capital	$130,000
302	Lee Retha Hale, Drawing	$13,000
401	Fees Income	$374,460
510	Depreciation Expense – Equipment	$21,160
511	Insurance Expense	$11,400
514	Rent Expense	$33,000
517	Salaries Expense	$166,000
518	Supplies Expense	$5,600
519	Telephone Expense	$6,800
523	Utilities Expense	$9,400

All accounts have normal balances. Journalize and post the closing entries. Use 4 as the page number for the general journal in journalizing the closing entries. Use account number 399 for the Income Summary Account.

Answer 1

--Closing entries

Date	Accounts title	Ref	Debit	Credit
31-Mar-16	Fees Income	401	$374,460
	Income Summary account	399		$374,460
	(to close revenue)
31-Mar-16	Income Summary account	399	$253,360
	Depreciation expense Equipment	510		$21,160
	Insurance expense	511		$11,400
	Rent Expense	514		$33,000
	Salaries expense	517		$166,000
	Supplies expense	518		$5,600
	Telephone expense	519		$6,800
	Utilities expense	523		$9,400
	(to close expenses)
31-Mar-16	Income Summary account	399	$121,100
	Lee Retha Hale, Capital	301		$121,100
	(to close net income)
31-Mar-16	Lee Retha Hale, Capital	301	$13,000
	Lee Retha Hale, Drawings	302		$13,000
	(to close drawings)