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Chapter 4: Q10SE (page 219)

Brett Teddy Enterprises had the following accounts and normal balances listed on its December 31st adjusted trial balance: Service Revenue, \(21,900; Salaries Expense, \)6,000; Rent Expense, \(4,400; Advertising Expense, \)3,100; and Dividends, $6,900. Journalize the closing entries for Teddy Enterprises.

Short Answer

Expert verified

Closing entries are as follows:

Journal entry

Date

Accounts and Explanation

Debit

Credit

Dec. 31

Service Revenue

$21,900

Income Summary

$21,900

To close revenue.

Dec. 31

Income Summary

$13,500

Salaries Expense

$6,000

Rent Expense

$4,400

Advertising Expense

$3,100

To close expenses.

Dec. 31

Income Summary

$8,400

Retained Earnings

$8,400

To close Income Summary

Dec. 31

Retained Earnings

$6,900

$6,900

Dividends

To close Dividends

Step by step solution

01

Explanation on Closing Entry

Closing entry is recorded at the end of the period to close balances of permanent account.

02

Calculation of net income

Net income is calculated as follows:

NetIncome=TotalRevenues-TotalExpenses=$21,900-$13,500=$8,400

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Most popular questions from this chapter

Why are financial statements prepared in a specific order? What is that order?

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\)6,000. This payment included the accrued amount at December 31, plus $2,000 for the first few days of January.

25A. Journalize the cash payment

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5. Unearned Revenue

The adjusted trial balance for Green Advertising Services is presented below: Account Title Office Supplies Cash Debit Credit Accounts Receivable Building Accumulated Depreciation鈥擝uilding Furniture Accumulated Depreciation鈥擣urniture Land Salaries Payable Accounts Payable Unearned Revenue Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Supplies Expense Depreciation Expense鈥擝uilding Balance \( 14,000 \) 195,200 \( 195,200 18,400 14,100 \) 36,100 19,600 7,200 10,600 30,000 31,400 16,000 18,300 49,800 8,400 28,600 2,900 1,300 13,500 15,800 6,500 47,900 Depreciation Expense鈥擣urniture Advertising Expense Total GREEN ADVERTISING SERVICES Adjusted Trial Balance December 31, 2018 Requirements 1. Prepare the income statement for the year ending December 31, 2018. 2. Prepare the statement of retained earnings for the year ending December 31, 2018. 3. Prepare the classified balance sheet as of December 31, 2018. Use the report form

Question:Refer to the Practice Set data provided in Chapters 2 and 3 for Crystal Clear Cleaning.

Requirements

1. Prepare a worksheet (optional) at November 30, 2018. Use the unadjusted trial balance from Chapter 2 and the adjusting entries from Chapter 3.

2. Prepare an income statement and statement of retained earnings for the month ended November 30, 2018. Also prepare a classified balance sheet at November 30, 2018, using the report format. Assume the Notes Payable is long-term. Use the worksheet prepared in Requirement 1 or the adjusted trial balance from Chapter 3.

3. Prepare closing entries at November 30, 2018, and post to the accounts. Open T-accounts for Income Summary and Retained earnings. Determine the ending balance in each account. Denote each closing amount as Clos. and each account balance as Balance.

4. Prepare a post-closing trial balance at November 30, 2018.
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