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The ledger of a company contained the following account balances on December 31: Accounts Payable $...

The ledger of a company contained the following account balances on December 31:

Accounts Payable $ 15,200 Fees Income $ 190,000
Accounts Receivable 6,800 Supplies 5,200
Accumulated Depreciation 10,000 Prepaid Rent 66,000
Cash 92,000 Rent Expense 10,000
Depreciation Expense 10,000 Supplies Expense 9,200
Equipment 80,000 Teresa Davis, Capital 138,400
Teresa Davis, Drawing 58,000 Utilities Expense 16,400


All the accounts have normal balances. Prepare the December 31 closing entries.

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Ans.

The closing entries for Davis Company on December 31:

Date General Journal Debit Credit
31-Dec Fees Income $190,000
             Income Summary $190,000
(Fees Income transferred to income Summary)
31-Dec Income Summary $45,600
             Depreciation Expense $10,000
             Rent Expense $10,000
             Supplies Expense $9,200
             Utilities Expesne $16,400
(Expenses transferred to income Summary)
31-Dec Income Summary ($190,000 - $ 45,600) $144,400
            Teresa Davis , Capital $144,400
(Net income transferred to Capital Account )
31-Dec Teresa Davis , Capital $58,000
             Teresa Davis , Drawing $58,000
( Drawings transferred to capital account )

ekkarill92 answered 2 years ago
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