Question

Problem 1: The following accounts relate to Fly-By-Night Airlines. Prepare the 4 necessary closing entries.

Depreciation Expense                                       $330

Fees Earned                                                       23450

Fly-By-Night Drawing                                          6000

Insurance Expense                                                 300

Miscellaneous Expense                                         450

Rent Expense                                                         1600

Salary Expense                                                       1620

Supplies Expense                                                     850

Problem 2:

Indicate which of the following accounts of the ABC Co. should be closed (temporary or nominal accounts are closed)

Accounts Payable                                                                       Fees Earned

Accumulated Depreciation-Equipment                                  Land

Depreciation Expense-Equipment                                           Supplies

Equipment                                                                                    Supplies Expense

ABC, Capital                                                                                  Wages Expense

ABC, Drawing                                                                                Wages Payable

Remember: Balance Sheet accounts (real or permanent accounts) are not closed

Answer 1

1
No.	General Journal	Debit	Credit
1	Fees Earned	23450
	Income Summary		23450
	(To close Revenue account)
2	Income Summary	5150
	Depreciation Expense		330
	Insurance Expense		300
	Miscellaneous Expense		450
	Rent Expense		1600
	Salary Expense		1620
	Supplies Expense		850
	(To close Expense account)
3	Income Summary	18300		=23450-5150
	Fly-By-Night, Capital		18300
	(To close Net income)
4	Fly-By-Night, Capital	6000
	Fly-By-Night Drawing		6000
	(To close Drawings)

2

The following accounts should be closed:

Depreciation Expense-Equipment

ABC, Drawing

Fees Earned

Supplies Expense

Wages Expense