Question

Summit Services Co. offers its services to individuals desiring to improve their personal images. After the accounts have been adjusted at May 31, the end of the fiscal year, the following balances were taken from the ledger of Summit Services:
Fees Earned $243,000
Dividends 33,000
Rent Expense 50,800
Retained Earnings 540,000
Supplies Expense 12,400
Wages Expense 213,300
Miscellaneous Expense 5,900

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

Answer 1

Answer:

May-31

Dr Fees earned $243,000

Retained earnings $33,500

Cr Rent expense $50,800

Cr Supplies expense $12,400

Cr Wages expense $213,300

Cr Miscellaneous expense $ 4,300

May-31

Dr Retained Earnings $33,000

Cr Dividends $33,000

Explanation:

Preparation to Journalize the closing entries required to close the accounts.

May-31

Dr Fees earned $243,000

Retained earnings $33,500

($213,300+$12,400+$50,800-$243,000)

Cr Rent expense $50,800

Cr Supplies expense $12,400

Cr Wages expense $213,300

Cr Miscellaneous expense $ 4,300

(To close the Expenses )

May-31

Dr Retained Earnings $33,000

Cr Dividends $33,000

(To close the dividends )