Question

After the accounts have been adjusted at March 31, the end of the fiscal year, the following balances were taken from the ledger of Haverty Services Co.:
Retained Earnings $587,500
Dividends 40,000
Fees Earned 542,145
Wages Expense 349,700
Rent Expense 83,900
Supplies Expense 31,475
Miscellaneous Expense 10,490

Required:
Journalize the two entries required to close the accounts.

Answer 1

Answer and Explanation:

The two entries for closing the accounts are shown below:

1 Fees earned $542,145

    To Income Summary $542,145

(Being  revenue accounts are closed)  

2 Income Summary Dr $475,565

     To Wages expense $349,700

     To Rent Expense $83,900

     To Supplies Expense $31,475

     To Miscellaneous expense $10,490

(Being expense accounts are closed)

These two entries should be recorded