Question

Sunland has year-end account balances of Sales Revenue $744,020, Interest Revenue $13,110, Cost of Goods Sold $513,065, Administrative Expenses $202,210, Income Tax Expense $32,779, and Dividends $20,221. Prepare the year-end closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Answer 1

Answer:

Explanation:

The closing entry for the following accounts are shown below:

1. Sales Revenue A/c Dr $744,020

Interest revenue A/c Dr $13,110

          To Income Summary $757,130

(Being revenue account closed)

2. Income summary A/c Dr $748,054

       To Cost of Goods Sold          $513,065

       To Administrative Expenses $202,210

       To  Income Tax Expense       $32,779

(Being expenses accounts are closed)

3. Income summary A/c Dr $9,076  ($757,130 -  $748,054)

                To Retained earning $9,076   ($757,130 -  $748,054)

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $20,221

            To Dividend A/c $20,221

(Being dividend account is closed)