Question

Side Kicks has year-end account balances of Sales Revenue $834,710; Interest Revenue $18,600; Cost of Goods Sold $583,930; Administrative Expenses $186,150; Income Tax Expense $32,990; and Dividends $18,615. Prepare the year-end closing entries.

Answer 1

Answer:

Revenue accounts:

Dr: Revenue -------------------------------------------$834,710

Dr: Interest Revenue --------------------------------$18,600

Cr: Income summary -----------------------------------------------------$853,310

Expense accounts:

Dr: Expense summary --------------------------------$803.070

Cr: Cost of Goods Sold --------------------------------------------------$583,930

Cr: Administrative Expenses -------------------------------------------$186,150

Cr: Income Tax Expense -------------------------------------------------$32,990

Income summary:

Dr: Income ----------------------------------------------------$50,240

Cr: Retained earnings ------------------------------------------------------$50,240

Dividend summary:

Dr: Retained earnings-------------------------------------$18,615

Cr: Dividend  -------------------------------------------------------------------$18,615

Explanation:

Revenue accounts:

Dr: Revenue -------------------------------------------$834,710

Dr: Interest Revenue --------------------------------$18,600

Cr: Income summary -----------------------------------------------------$853,310

Expense accounts:

Dr: Expense summary --------------------------------$803.070

Cr: Cost of Goods Sold --------------------------------------------------$583,930

Cr: Administrative Expenses -------------------------------------------$186,150

Cr: Income Tax Expense -------------------------------------------------$32,990

Income summary:

Dr: Income ----------------------------------------------------$50,240

Cr: Retained earnings ------------------------------------------------------$50,240

Dividend summary:

Dr: Retained earnings-------------------------------------$18,615

Cr: Dividend  -------------------------------------------------------------------$18,615