Question

a company had a revenue of 550,000, rent expense of 100,000, utility expense of 10,000, salary expense of 125,000, depreciation expense of 39,000, advertising expense of 40,200, dividends in the amount of 183,000 and an ending balance in retained earnings of 402,300what is the appropriate journal entry for income summary?

Answer 1

Answer:

Explanation:

The closing entries for the following accounts are shown below:

1. Service Revenue A/c Dr $550,000

               To Income Summary $550,000

(Being revenue account closed)

2. Income summary A/c Dr $314,200

           To Depreciation Expense $39,000

           To Salaries expense  $125,000

           To Utilities Expense $10,000

           To Rent Expense $100,000

           To Advertising expense $40,200

(Being expenses accounts are closed)

3. Income summary A/c Dr $235,800   ($550,000 - $314,200)

             To Retained earning $235,800

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $183,000

                      To Dividend A/c $183,000

(Being dividend account is closed)