1. Preparation of the December 31, closing entries for Cruz Company.
General Journal
1. Dr Service revenue $48,100
Cr Income summary $48,100
(To record closing entry for revenue)
2. Dr Income summary $36,872
($2,000+$28,042+$2,020+$3,223+$1,587)
Cr Depreciation expense-equipment $2,000
Cr Salaries expense $28,042
Cr Insurance expense $2,020
Cr Rent expense $3,223
Cr Supplies expense $1,587
(To record closing entry for expense)
3. Dr Income summary $11,228
Cr Retained earnings $11,228
($48,100-$36,872)
(To close income summary account)
4. Dr Retained earnings $6,000
Cr Dividend $6,000
(To close entry for dividend)
2. Preparation of the December 31, post-closing trial balance for Cruz Company
Debit side
Cash $18,000
Supplies $9,600
Prepaid insurance $2,000
Equipment $23,000
Total Debit side $52,600
Credit side
Accumulated depreciation—Equipment $ 6,500
Retained earnings $46,100
($40,872+$11,228-$6,000)
Total Credit side 52,600
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