Question

The income statement for the Tamarisk, Inc. for the month ended July 31 shows Service Revenue $18,470, Salaries and Wages Expense $9,380, Maintenance and Repairs Expense $4,220, and Income Tax Expense $1,210. The statement of retained earnings shows an opening balance for Retained Earnings of $21,500 and Dividends $1,980.Prepare closing journal entries.

Answer 1

Answer:

Explanation:

The closing entry for the following accounts are shown below:

1. Service Revenue A/c Dr $18,470

              To Income Summary $18,470

(Being revenue account closed)

2. Income summary A/c Dr $14,810

               To Maintenance and Repairs Expense $4,220

               To Salaries and Wages Expense $9,380

                To Income Tax Expense $1,210

(Being expenses accounts are closed)

3. Income summary A/c Dr $3,660

                 To Retained earning $3,660

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $1,980

                 To Dividend A/c $1,980

(Being dividend account is closed)