Answer:
a. 31-Jul
Dr Service Revenue16,000
Cr Income Summary16,000
31-Jul
Dr Income Summary11,900
Cr Salaries & Wages Expense8,400
Cr Maintenance & Repairs Expense2,500
Cr Income Tax Expense1,000
31-Jul
Dr Income Summary4,100
Cr Retained Earnings4,100
31-Jul
Dr Retained Earnings1,300
Cr Dividends1,300
b. $22,800
Explanation:
a. Preparation of closing journal entries.
31-Jul
Dr Service Revenue16,000
Cr Income Summary16,000
(Being To close revenue account)
31-Jul
Dr Income Summary11,900
(8,400+2,500+1,000)
Cr Salaries & Wages Expense8,400
Cr Maintenance & Repairs Expense2,500
Cr Income Tax Expense1,000
(Being To close expense accounts)
31-Jul
Dr Income Summary4,100
Cr Retained Earnings4,100
(16,000-11,900)
(Being To close net income to Retained earning)
31-Jul
Dr Retained Earnings1,300
Cr Dividends1,300
(Being To close dividends to Retained earning )
b. Calculation fo What is the ending balance in Retained Earnings
Retained Earnings ending balance=$20,000−$1,300+$16,000−$8,400−$2,500−$1,000
Retained Earnings ending balance=$22,800
Therefore Retained Earnings ending balance will be $22,800
