/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q.3-16E Question: E3-16 (L05) (Closing E... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 3: Q.3-16E (page 135)

Question: E3-16 (L05) (Closing Entries for a Corporation) Presented below are selected account balances for Homer Winslow Co. as of December 31, 2017.

Inventory 12/31/17 \(60,000 Cost of Goods Sold \)225,700

Common Stock \(75,000 Selling Expenses \)16,000

Retained Earnings \(45,000 Administrative Expenses \)38,000

Dividends \(18,000 Income Tax Expenses \)30,000

Sales Returns and

Allowances \(12,000

Sales Discounts \)15,000

Sales Revenue $410,000

Instructions:

Prepare closing entries for Homer Winslow Co. on December 31,2017. (Omit explanations)

Short Answer

Expert verified

Answer:

The amount of income summary expenses is $336,700.

Step by step solution

01

Meaning of Journal entry

The journal entry is the act of keeping a record of any transactions and events either economic or non-economic. The recording of journal entry, includes Serial number or transaction number, Date, Accounts titles and explanations, debit and credit, and narrations.

02

Closing Entries for Homer Winslow co. on December 31, 2017

Date

Account Titles and Explanations

Debit

Credit

Dec 31, 2017

Sales Revenue

$410,000

Income Summary

$410,000

Dec 31, 2017

Income Summary

$336,700

Cost of Goods Sold

$225,700

Sales returns and allowances

$12,000

Sales Discounts

$15,000

Selling Expenses

$16,000

Administrative Expenses

$38,000

Income Tax Expenses

$30,000

Dec 31, 2017

Income Summary

$73,300

Retained Earnings

$73,300

Dec 31, 2017

Retained Earnings

$18,000

Dividends

$18,000

Working notes:

Dec 31: Sales revenue = $410,000 (Given)

Dec 31: Income Summary for expenses

= ($225,700 + $12,000 + $15,000 + $16,000 + $38,000 + $30,000)

= $336,700

Dec 31: Retained Earnings = ($410,000 - $336,700) = $73,300

Dec 31: Dividends = $18,000 (Given)

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

When salaries and wages expense for the year is computed, why are beginning accrued salaries and wages subtracted from, and ending accrued salaries and wages added to, salaries and wages paid during the year?

Is it necessary that a trial balance be taken periodically? What purpose does it serve?

(L07) (Cash to Accrual Basis) Jill Accardo, M.D., maintains the accounting records of Accardo Clinic on a cash basis. During 2017, Dr. Accardo collected \(142,000 from her patients and paid \)55,470 in expenses. At January 1, 2017, and December 31, 2017, she had accounts receivable, unearned service revenue, accrued expenses, and prepaid expenses as follows. (All long-lived assets are rented.)

January 1, 2017, December 31,2017

Account receivable \(9,250 \)15,927

Unearned service revenue \(2,840 \)4,111

Accrued expenses \(3,435 \)2,108

Prepaid expenses \(1,917 \)3,232

Instructions:

Prepare a schedule that converts Dr. Accardo鈥檚 鈥渆xcess of cash collected over cash disbursed鈥� for the year 2017 to net income on an accrual basis for the year 2017.

Vedula Advertising was founded by MuraliVedula in January 2015. On the next page are both the adjusted and unadjusted trial balances as of December 31, 2017.

VEDULA ADVERTISING

TRIAL BALANCE

DECEMBER 31, 2017


Unadjusted
Adjusted

Dr.

Cr.

Dr.

Cr.

Cash

\( 11,000

\) 11,000

Accounts Receivable

16,000

19,500

Prepaid Insurance

9,400

6,500

Supplies

3,350

1,790

Equipment

60,000

60,000

Accumulated Depreciation鈥擡quipment

\( 25,000

\) 30,000

Notes Payable

8,000

8,000

Accounts Payable

2,000

2,000

Interest Payable

0

560

Unearned Service Revenue

5,000

3,100

Salaries and Wages Payable

0

820

Common Stock

20,000

20,000

Retained Earnings

5,500

5,500

Dividends

10,000

10,000

Service Revenue

57,600

63,000

Salaries and Wages Expense

9,000

9,820

Insurance Expense

1,560

Interest Expense

560

Depreciation Expense

5,000

Supplies Expense

2,900

Rent Expense

4,350

4,350

\(123,100

\)123,100

\(132,980

\)132,980

Instructions

  1. Journalize the annual adjusting entries that were made.
  2. Prepare an income statement and a retained earnings statement for the year ended December 31, and a classified balance sheet at December 31.
  3. Identify which accounts should be closed on December 31.
  4. If the note has been outstanding 10 months, what is the annual interest rate on that note?
  5. If the company paid $10,500 in salaries and wages in 2017, what was the balance in Salaries and Wages Payable on December 31, 2016?

Andrea Pafko, a fellow student, contends that the double-entry system means that each transaction must be recorded twice. Is Andrea correct? Explain.
See all solutions

Recommended explanations on Business Studies Textbooks

Business Data Analytics

Read Explanation

Operational Management

Read Explanation

Organizational Communication

Read Explanation

Strategic Direction

Read Explanation

Change Management

Read Explanation

Family Business

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.