In: Accounting
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Prepare the closing entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Post above entries in the Income Summary account.
(Post entries in the order of journal entries presented
in the previous part.) |
1. Closing Entries:
Date | Account title and explanation | Debit | Credit |
Aug 31 | Sales | $700,000 | |
Interest revenue | $930 | ||
Income summary | $700,930 | ||
[To close revenue accounts] | |||
Aug 31 | Income summary | $635,230 | |
Sales discounts | $3,800 | ||
Sales returns and allowances | $14,400 | ||
Cost of goods sold [575500+2100*] | $577,600 | ||
Depreciation expense | $6,730 | ||
Freight out | $5,100 | ||
Insurance expense | $2,800 | ||
Interest expense | $2,300 | ||
Rent expense | $16,500 | ||
Supplies expense | $6,000 | ||
[To close expenses accounts] | |||
Aug 31 | Income summary [700930-635230] | $65,700 | |
V. Whispering Winds, Capital | $65,700 | ||
[To close income summary] | |||
Aug 31 | V. Whispering Winds, Capital | $60,100 | |
V. Whispering Winds, Drawings | $60,100 | ||
[To close drawings account] |
*Inventory shrinkage = $58,000-$55,900 = $2,100
2. Income summary Account:
Income Summary | |||
Aug 31 | $635,230 | Aug 31 | $700,930 |
Aug 31 | $65,700 | ||
Aug 31 End. Bal. | $0 |