Question

The income statement for the Skysong, Inc. for the month ended July 31 shows Service Revenue $16,010, Salaries and Wages Expense $8,410, Maintenance and Repairs Expense $2,510, and Income Tax Expense $1,010. The statement of retained earnings shows an opening balance for Retained Earnings of $20,010 and Dividends $1,350 ▼ (a) Prepare closing journal entries. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically Indented when the amount Is entered. Do not indent manually.)

Answer 1

Answer and Explanation:

The closing entries for the following accounts are presented below

1. Service Revenue A/c Dr $16,010

               To Income Summary $16,010

(Being revenue account closed)

2. Income summary A/c Dr $11,930

           To Maintenance and Repairs Expense $2,510

           To Salaries and Wages Expense $8,410

            To Income Tax Expense $1,010

(Being expenses accounts are closed)

3. Income summary A/c Dr $4,080    ($16,010 - $11,930)

                 To Retained earning $4,080

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $1,350

                  To Dividend A/c $1,350

(Being dividend account is closed)