Question

In: Accounting

The ledger of Cranston Corporation has the following account balances at the company's first year end...

The ledger of Cranston Corporation has the following account balances at the company's first year end of October 31, 2018.

Accounts payable $  3,210 Prepaid rent $  3,070
Accounts receivable 4,810 Rent expense 730
Accumulated depreciation 5,250 Salaries expense 7,060
Bank loan payable 7,300 Salaries payable 1,310
Cash 17,160 Service revenue 13,730
Common shares 22,300 Supplies 2,400
Depreciation expense 1,750 Supplies expense 630
Dividends declared 420 Unearned revenue 3,020
Equipment 17,500 Utilities expense 500
Interest expense 300
Interest payable 210

Prepare the closing entries at October 31, 2018.

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Solutions

Expert Solution

Date

General Journal

Debit

Credit

Oct.31, 2018

To close all the expense account to Income Summary Statement

Income Summary Statement

$8,090

Interest Expense

$300

  Rent Expense

$730

Salaries Expense

$7,060

Supplies Expense

$630

Utilities Expense

$500

(To close expense accounts)

Oct.31, 2018

To Close all the revenue account to Income Summary

Service Revenue

$13,730

Income Summary Statement

$13,730

(To close revenue accounts)

Oct.31, 2018

Income Summary Statement (13,730 - 890)

$12,840

   Capital

$345

(To close income summary statement and transfer the profit to capital)

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