Question

On december 31 2019 the ledger of lopez company contained the following account balances:Cash $31,500 Maria Lopez, Drawing $12,000Accounts Receivable 2,150 Fees Income 46,250Supplies 1,350 Depreciation Expense 2,000Equipment 24,500 Salaries Expense 15,500Accumulated Depreciation 1,750 Supplies Expense 2,250Accounts Payable 2,250 Telephone Expense 1,850Maria Lopez, Capital 46,750 Utilities Expenses 3,900

Answer 1

Answer:

A. Dec 31, 2019

Dr Fees Income 46,250

Dr Income Summary 46,250

B. Dec 31, 2019

Dr Income Summary 25,500

Cr Depreciation Expense 2,000

Cr Salaries Expense 15,500

Cr Supplies Expense 2,250

Cr Telephone Expense 1,850

Cr Utilities Expense 3,900

C. Dec 31, 2019

Dr Income Summary 21,250

Cr Maria Lopez, Capital 21,250

D. Dec 31, 2019

Maria Lopez, Capital 12,000

Maria Lopez, Drawing 12,000

Explanation:

A. Preparation of the closing entry for revenue.

Dec 31, 2019

Dr Fees Income 46,250

Dr Income Summary 46,250

(To close revenue accounts)

B. Preparation of the closing entry for expenses.

Dec 31, 2019

Dr Income Summary 25,500

(2,000+15,500+2,250+1,850+3,900)

Cr Depreciation Expense 2,000

Cr Salaries Expense 15,500

Cr Supplies Expense 2,250

Cr Telephone Expense 1,850

Cr Utilities Expense 3,900

(To close expense accounts)

C. Preparation of the closing entry for balance of income summary

Dec 31, 2019

Dr Income Summary 21,250

(46,750-25,500)

Cr Maria Lopez, Capital 21,250

(To close balance of income summary)

D.Preparation of the closing entry for the drawing account

Dec 31, 2019

Maria Lopez, Capital 12,000

Maria Lopez, Drawing 12,000

(To close drawing account)