Prepare Closing Entries Using the Income Summary Account. Close the temporary accounts to income summary. The...

Prepare Closing Entries Using the Income Summary Account. Close the temporary accounts to income summary. The balance of $8,500 in the retained earnings account is from the beginning of the year. What is the ending retained earnings balance after the closing entries?

Company
	Income Statement for the year ending December 31
			Debit	Credit

Retained Earnings				8,500
Dividends			2,000
Sales				20,000
Cost of Goods Sold			8,000
Selling and Administrative Expenses			3,000
Interest Expense			1,500
Total Expenses			14,500
				28,500
Net Income/Loss		14,000

Expert Solution

Closing Entries:
Accounts title and explanations		Debit $	Credit $
Sales Account Dr.		20000
Income Summary			20000

Income Summary Account Dr.		12500
Cost of Goods sold Account			8000
Selling and admin expense			3000
Interest expense			1500

Income Summary Account Dr.		7500
Retained earnings Account			7500

Retained earnings account Dr.		2000
Dividend account			2000


Balance in Retained Earnings:
Beginning balance in Retained earningd	8500
Add: Net income for the yeear	7500
Less: Dividend paid	2000
Ending balance in Retained earnings	14000

ekkarill92 answered 1 year ago

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