Answer:
Sales (Dr.) $45,000
Income Summary (Cr.) $45,000
Income summary (Dr.) $63,900
Advertising Expense (Cr.) $1,200
Rent expense (Cr.) $5,600
Office Supplies Cost (Cr.) $9,800
Insurance Expense (Cr.) $7,000
Sales Returns (Cr.) $2,900
Interest Expense (Cr.) $3,200
Cost of Goods sold (Cr.) $27,500
Selling and administrative expense (Cr.) $6,700
Income Summary (Dr.) $250,000
Capital investment (Cr.) $ 250,000
Explanation:
Closing entries are prepared to close business transactions that occurred during the month. These transactions are closed with a contra account of Income Summary. All debit balance are credited with a debit of Income summary account and vice versa. the temporary account balances are reset to zero after closing entries are passed.
