Answer:
Jul-31
Dr Service revenue $41,500
Dr Retained earnings $5,865
Cr Wages expense $37,425
Cr Rent expense $3,000
Cr Advertising expense $2,750
Cr Office supplies expense $1,465
Cr Store supplies expense $2,150
Cr Depreciation expense $575
Jul-31
Dr Retained earnings $13,250
Cr Dividends $13,250
( To close dividends)
Explanation:
Preparation of the closing entries for Ladonna Douglas Corporation
First step is to prepare the income statement
INCOME STATEMENT
Revenues:
Service revenue $41,500
Less Expenses:
Wages expense $37,425
Rent expense $3,000
Advertising expense $2,750
Office supplies expense $1,465
Store supplies expense $2,150
Depreciation expense $575
Total expenses (-$47,365)
Net Loss ($5,865)
($41,500-$47,365)
Now let Prepare the closing entries
Jul-31
Dr Service revenue $41,500
Dr Retained earnings $5,865
Cr Wages expense $37,425
Cr Rent expense $3,000
Cr Advertising expense $2,750
Cr Office supplies expense $1,465
Cr Store supplies expense $2,150
Cr Depreciation expense $575
( To close income summary)
Jul-31
Dr Retained earnings $13,250
Cr Dividends $13,250
( To close dividends)
