Question

Presented below are selected account balances for Homer Winslow Co. as of December 31, 2014.

Answer 1

Answer:

1. Dr Sales Revenue $411,940

Cr Income Summary $411,940

2. Dr Income summary $341,540

Cr Cost of Goods Sold $225,870

Cr Sales Returns and Allowances $13,650

Cr Sales Discounts $15,290

Cr Selling Expenses $17,400

Cr Administrative Expenses $39,150

Cr Income Tax Expense $30,180

3. Dr Income summary $70,400

Cr Retained earning $70,400

4. Dr Retained earnings $19,080

Cr Dividend $19,080

Explanation:

Preparation of closing entries for Homer Winslow Co. on December 31, 2014

1. Dr Sales Revenue $411,940

Cr Income Summary $411,940

(Being To close expense accounts)

2. Dr Income summary $341,540

($225,870+$13,650+$15,290+$17,400+$39,150+$30,180)

Cr Cost of Goods Sold $225,870

Cr Sales Returns and Allowances $13,650

Cr Sales Discounts $15,290

Cr Selling Expenses $17,400

Cr Administrative Expenses $39,150

Cr Income Tax Expense $30,180

(Being To close expense accounts)

3. Dr Income summary $70,400

( $411,940 -$341,540 )

Cr Retained earning $70,400

(Being To close net income)

4. Dr Retained earnings $19,080

Cr Dividend $19,080

(Being To close dividends to retained earnings)