Answer:
Services revenue 44,000 debit
Income Summary 44,000 credit
--to close revenues accounts--
Income Summary 33,100 debit
Depreciation expense—Equipment 3,000 credit
Salaries expense 22,000 credit
Insurance expense 2,500 credit
Rent expense 3,400 credit
Supplies expense 2,200 credit
--to close expenses account--
Income Summary 7,000 debit
A. Cruz, Withdrawals 7,000 credit
--to close withdrawals account--
Income summary 3,900 debit
A. Cruz, Capital Account 3,900 credit
--to close Income Summary against Cruz, capital account--
Cash 19,000
Supplies 13,000
Prepaid insurance 3,000
Equipment 24,000
Accumulated depreciation—Equipment 7,500
A. Cruz, Capital 51,500
Totals 59,000 59,000
Explanation:
To close the accounting period we will use income summary to write off expenses, revenues and withdrawals account. Then, the balance of this account will be transfer into Cruz Capital Account
income summary balance: 44,000 -33,100 - 7,000 = 44,000 - 40,100 = 3,900
Then we post the trial balance considering assets has debit balance while liabilities and equity credit.
We check if everything is okay and it does. Debit = Credit
