Question

Danos Company’s partial worksheet for the month ended December 31, 2019, is shown below. Open the owner’s capital account (account number 301) in the general ledger and record the December 1, 2019, balance of $77,000 shown on the worksheet.

	INCOME STATEMENT				BALANCE SHEET
ACCOUNT NAME	DEBIT		CREDIT		DEBIT		CREDIT
Cash					23,500
Accounts Receivable					24,600
Supplies					10,300
Equipment					66,500
Accum. Depr. - Equip.							22,600
Accounts Payable							20,300
D. Danos, Capital							77,000
D. Danos, Drawing					7,300
Fees Income			53,800
Salaries Expense	29,400
Rent Expense	4,100
Supplies Expense	2,050
Depr. Exp. −Equip.	5,950
Totals	41,500		53,800		132,200		119,900
Net Income	12,300						12,300
	53,800		53,800		132,200		132,200

Prepare the closing entries for the Danos Company’s on December 31, 2019. Post the closing entries to the owner’s capital account. Prepare a postclosing trial balance.

Answer 1

Solution:

Danos Company
Closing Entries
No.	Account title and explanation	Debit	Credit
1	Fees Income Dr	$53,800
	To Income Summary		$53,800
	(To transfer fees income)
2	Income Summary Dr	$41,500
	To Salaries Expense		$29,400
	To Rent expense		$4,100
	To supplies Expense		$2,050
	To Depr. Expense - Equip.		$5,950
	(To transfer expenses)
3	Income Summary Dr [$53800 - $41500]	$12,300
	To D. Danos, Capital		$12,300
	(To Transfer income summary balance)
4	D. Danos, Capital Dr	$7,300
	To D. Danos, Drawings		$7,300
	(To transfer drawings)

General Ledger
D. Danos, Capital		Account no. 301
Account Title	Debit	Credit	Balance
Dec 01, 2019			$77,000
Dec 31, 2019		$12,300	$89,300
Dec 31, 2019	$7,300		$82,000

Post Closing Trial Balance
Account Title	Debit	Credit
Cash	$23,500
Accounts Receivable	$24,600
Supplies	$10,300
Equipment	$66,500
Accumulated Depreciation Equipment		$22,600
Accounts Payable		$20,300
D. Danos, Capital		$82,000
Total	$1,24,900	$1,24,900