Explanation:
The closing journal entries are as follows
1. Sales $249,500
Interest Income $120
Purchases Returns and Allowances $1,500
Purchases Discounts $1,430
To Income Summary $252,550
(Being revenue account closed)
2. Income summary A/c Dr $227,280
To Sales Returns and Allowances $3,400
To Sales Discounts $2,400
To Purchases $133,400
To Freight In $1,700
To Rent Expense $8,000
To Utilities Expense $2,830
To Telephone Expense $1,440
To Salaries Expense $65,100
To Payroll Taxes Expense $5,170
To Supplies Expense $1,600
To Depreciation Expense $2,000
To Interest Expense $240
(Being expenses accounts are closed)
3. Income summary A/c Dr $28,570
To John Capeletti, Capital $28,570
(Being the net income is closed)
The calculation is shown below:
= $40,900 + $252,550 - $227,280 - $37,600
= $28,570
4. John Capeletti, Capital $25,700
To John Capeletti, Drawings $25,700
(Being drawing account is closed)
