Answer:
The entries are made as follows;
Explanation:
Service Revenue Dr.$4,350
Income Summary Cr.$4,350
(To close revenue account)
Income Summary
Supplies expense Dr.$910
Insurance Expense Dr.$540
Salaries and Wages Expense Dr.$1,770
Income Summary Cr.$3,220
(To close expenses)
Income Summary (4,350-3,220) Dr.$1,130
Retained Earnings Cr.$1,130
Answer:
a. Utilities Expense 500
Cash 500
Explanation:
Given: Consulting immediately paid $500 cash for utilities.
As $500 cash been paid for utility expenses.
We know the golden rule of accounting transaction:
- Personal accounts: Debit the receiver, credit the giver.
- Impersonal real account: Debit what comes in, credit what goes out.
- Impersonal Nominal account: Debit all expenses and losses, credit all profit and gains.
Paid for utility expense of firm is not the personal account, however, it is impersonal account. In the given case, cash is going out of business.
Therefore, Debit all expense and losses and credit what goes out of business.
Journal Entry of the transaction:
Debit utility expenses account--- $500
Credit cash account--- $500
