Question

The income statement for the Timberline Golf Club Inc. for the month ended July 31 shows Service Revenue $18,530; Salaries and Wages Expense $9,100; Maintenance and Repairs Expense $4,190; and Income Tax Expense $1,110. The statement of retained earnings shows an opening balance for Retained Earnings of $20,590 and Dividends $1,830.Prepare closing journal entries. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Answer and Explanation:

The closing journal entries are as follows:

1. Service revenue Dr $18,530

        To Income summary $18,530

(being revenue account is closed)

2. Income summary Dr $14,400

          To Salaries and Wages Expense $9,100

          To Maintenance and Repairs Expense $4,190

          To Income Tax Expense $1,110

(being expenses account is closed)

3. Income summary Dr $4,130 ($18,530 - $14,400)

       To retained earnings $4,130

(Being closing of the net income is recorded)

4. Retained earnings Dr $1,830

         To Dividend $1,830

(being dividend account is closed)