Closing Example - Financial accounting help PDF

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Financial accounting help...

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1/17/2021

CengageNOWv2 | Online teaching and learning resource from Cengage Learning

Closing entries

Instructions After the accounts have been adjusted at April 30, the end of the fiscal year, the following balances were taken from the ledger of Nuclear Landscaping Co.:

Retained Earnings

$643,600

Dividends

10,500

Fees Earned

356,500

Wages Expense

283,100

Rent Expense

56,000

Supplies Expense

11,500

Miscellaneous Expense

13,000

Journalize the four entries required to close the accounts. Refer to the Chart of Accounts for exact wording of account titles.

Chart of Accounts

CHART OF ACCOUNTS Nuclear Landscaping Co. General Ledger

ASSETS 11 Cash

REVENUE 41 Fees Earned

12 Accounts Receivable 13 Supplies

EXPENSES

14 Prepaid Rent

51 Wages Expense

15 Land

52 Rent Expense 53 Supplies Expense

LIABILITIES

59 Miscellaneous Expense

21 Accounts Payable 22 Unearned Fees 23 Wages Payable

EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary

Journal

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1/17/2021

CengageNOWv2 | Online teaching and learning resource from Cengage Learning

Journalize the four entries required to close the accounts. Refer to the Chart of Accounts for exact wording of account titles.

How does grading work? PAGE 11

Score: 136/137

JOURNAL DATE 1



2

Apr. 30

✔

DESCRIPTION

POST. REF.

Closing Entries







356,500.00

Fees Earned Income Summary

3 4

30

✔

Income Summary Wages Expense

5 6

Rent Expense

7

Supplies Expense

8

Miscellaneous Expense 30

✔

Income Summary Retained Earnings

30

11

✔

12

Retained Earnings Dividends

✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

DEBIT

CREDIT



ASSETS



56,000.00



11,500.00



13,000.00



7,100.00

 

7,100.00 10,500.00



EQUITY



↑ ↓

283,100.00





✔

✔



LIABILITIES

↓ 356,500.00

363,600.00



✔



ACCOUNTING EQUATION

✔ ✔ ✔ ✔ ✔

✔

↑ ↑ ↑ ↑ ↑ ↓

✔

↓ 10,500.00

✔

↑

✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

Points:

25.81 / 26

Feedback Check My Work In preparing closing entries, recall that (1) revenue accounts are debited for their balances, and the income summary account is credited for the total revenue; (2) expense accounts are credited for their balances, and the income summary account is debited for the total expense; (3) Income Summary is debited or credited for its balance, depending on whether the balance is a net income or net loss, respectively, with an equal offset to the retained earnings account; and (4) the retained earnings account is debited for the balance of the dividends account.

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