Question

The adjusted trial balance of Armstrong Corporation at December 31 shows that sales revenue for the year was $ 520 comma 000 and other revenue was $ 47 comma 000. Cost of goods sold for that same period was $ 295 comma 000​, while other expenses totaled $ 200 comma 000. The corporation declared and paid dividends of $ 15 comma 000 during the year. The balance of retained earnings before closing entries was $ 490 comma 000.

1. Prepare the closing entries for revenues, expenses, and dividends for the year.

Answer 1

Answer:

Explanation:

Below are the closing entries for the relevant accounts:

1. Sales Revenue A/c Dr $520,000

  Other revenue A/c Dr $47,000

                       To Income Summary $567,000

(Being revenue account closed)

2. Income summary A/c Dr $495,000

                    To  Cost of goods sold A/c $295,000

                    To Other  Expenses A/c $200,000

(Being expenses accounts are closed)

3. Income summary A/c Dr $72,000     ($597,000 - $495,000)

                   To Retained earning $72,000

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $15,000

                     To Dividend A/c $15,000

(Being dividend account is closed)