Question

The year-end adjusted trial balance of the Timmons Tool and Die Corporation included the following account balances: retained earnings, $310,000; dividends, $48,000; sales revenue, $970,000; cost of goods sold, $670,000; salaries expense, $150,000; rent expense, $47,000; and interest expense, $21,000. Prepare the necessary closing entries.

Answer 1

Answer:

1.                      Journal - Closing Entries

Date   Account Titles                     Debit            Credit

           Sales Revenue               $970,000

                Income summary                             $970,000

        (Closing of revenue account)

     

2.   Closing the expenses accounts as necessary

                       Journal - Closing Entries

Date     Account Titles                    Debit         Credit

            Income summary             $888,000

                   Cost of goods sold                       $670,000

                   Salary expenses                           $150,000

                   Rent expenses                              $47,000

                   Interest expenses                         $21,000

             (Closing of expenses account)

3.  Closing net Income

                        Journal - Closing Entries

Date     Account Titles                      Debit          Credit

             Income summary             $82,000

                 Retained earning                              $34,000

                 Dividends                                           $48,000

             (Closing of net income)