Question

Presented below are selected account balances for Sunland Co. as of December 31, 2020. Inventory 12/31/20 $59,550 Cost of Goods Sold $222,005 Common Stock 76,250 Selling Expenses 15,964 Retained Earnings 44,780 Administrative Expenses 37,422 Dividends 18,160 Income Tax Expense 30,070 Sales Returns and Allowances 11,865 Sales Discounts 15,140 Sales Revenue 405,210 Prepare closing entries for Sunland Co. on December 31, 2020.

Answer 1

Answer:

Explanation:

The closing entries for the following accounts are

1. Sales Revenue A/c Dr $405,210

                 To Income Summary $405,210

(Being revenue account closed)

2. Income summary A/c Dr $332,466

              To Cost of Goods Sold $222,005

              To Selling Expenses $15,964

              To Administrative Expenses $37,422

              To Income Tax Expense $30,070

              To Sales Returns and Allowances $11,865

              To Sales Discounts $15,140

(Being credit balance accounts are closed)

3. Income summary A/c Dr $72,744           ($405,210 - $332,466)

                To Retained earning $72,744

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $18,160

                        To Dividend A/c $18,160

(Being dividend account is closed)