**Closing Entries and Journalization for Harrison's Goodwill Service Company** The following section outlines the process for journalizing the entries required to close the accounts for Harrison's Goodwill Service Company as of January 31st. These balances are derived from the ledger after adjustments have been made and mark the end of the fiscal year. The purpose of closing entries is to reset temporary account balances (like revenue and expenses) to zero, preparing them for the new accounting period. ### Balances and Account Details: - **Harrison Taylor, Capital**: $370,520 - **Harrison Taylor, Drawing**: $12,540 - **Fees Earned**: $133,440 - **Wages Expense**: $46,320 - **Rent Expense**: $16,980 - **Supplies Expense**: $1,580 - **Miscellaneous Expense**: $1,930 ### Journalization Instructions: - **Date**: January 31 - **Specifics**: The instructions indicate that you need to journalize the entries required to close these accounts. If any account does not require an entry, the amount box should be left blank. ### Visual Explanation: On the displayed chart or form, you'll find a series of boxes aligned with the account names and dates. These boxes are designed to record the debits and credits needed to close the accounts. Typically, the steps would involve: 1. **Closing Revenue Accounts**: Transfer the balance of Fees Earned to the Income Summary account. 2. **Closing Expense Accounts**: Transfer the balances of expense accounts (Wages, Rent, Supplies, and Miscellaneous) to the Income Summary account. 3. **Closing Income Summary**: Transfer the balance of the Income Summary account to Harrison Taylor, Capital. 4. **Closing Drawing Account**: Transfer the balance of Harrison Taylor, Drawing to Harrison Taylor, Capital. These actions ensure that all revenue and expense accounts begin the new fiscal period with a zero balance, aligning with proper accounting practices. Remember, the correct journal entries are vital to accurately reflect the financial position and performance of the company for stakeholders.

Closing Entries and Journalization for Harrison's Goodwill Service Company The following section outlines the process for journalizing the entries required to close the accounts for Harrison's Goodwill Service Company as of January 31st. These balances are derived from the ledger after adjustments have been made and mark the end of the fiscal year. The purpose of closing entries is to reset temporary account balances (like revenue and expenses) to zero, preparing them for the new accounting period. ### Balances and Account Details: - Harrison Taylor, Capital: $370,520 - Harrison Taylor, Drawing: $12,540 - Fees Earned: $133,440 - Wages Expense: $46,320 - Rent Expense: $16,980 - Supplies Expense: $1,580 - Miscellaneous Expense: $1,930 ### Journalization Instructions: - Date: January 31 - Specifics: The instructions indicate that you need to journalize the entries required to close these accounts. If any account does not require an entry, the amount box should be left blank. ### Visual Explanation: On the displayed chart or form, you'll find a series of boxes aligned with the account names and dates. These boxes are designed to record the debits and credits needed to close the accounts. Typically, the steps would involve: 1. Closing Revenue Accounts: Transfer the balance of Fees Earned to the Income Summary account. 2. Closing Expense Accounts: Transfer the balances of expense accounts (Wages, Rent, Supplies, and Miscellaneous) to the Income Summary account. 3. Closing Income Summary: Transfer the balance of the Income Summary account to Harrison Taylor, Capital. 4. Closing Drawing Account: Transfer the balance of Harrison Taylor, Drawing to Harrison Taylor, Capital. These actions ensure that all revenue and expense accounts begin the new fiscal period with a zero balance, aligning with proper accounting practices. Remember, the correct journal entries are vital to accurately reflect the financial position and performance of the company for stakeholders.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

**Closing Entries and Journalization for Harrison's Goodwill Service Company**

The following section outlines the process for journalizing the entries required to close the accounts for Harrison's Goodwill Service Company as of January 31st. These balances are derived from the ledger after adjustments have been made and mark the end of the fiscal year. The purpose of closing entries is to reset temporary account balances (like revenue and expenses) to zero, preparing them for the new accounting period.

### Balances and Account Details:

- **Harrison Taylor, Capital**: $370,520
- **Harrison Taylor, Drawing**: $12,540
- **Fees Earned**: $133,440
- **Wages Expense**: $46,320
- **Rent Expense**: $16,980
- **Supplies Expense**: $1,580
- **Miscellaneous Expense**: $1,930

### Journalization Instructions:

- **Date**: January 31
- **Specifics**: The instructions indicate that you need to journalize the entries required to close these accounts. If any account does not require an entry, the amount box should be left blank.

### Visual Explanation:

On the displayed chart or form, you'll find a series of boxes aligned with the account names and dates. These boxes are designed to record the debits and credits needed to close the accounts. Typically, the steps would involve:

1. **Closing Revenue Accounts**: Transfer the balance of Fees Earned to the Income Summary account.
2. **Closing Expense Accounts**: Transfer the balances of expense accounts (Wages, Rent, Supplies, and Miscellaneous) to the Income Summary account.
3. **Closing Income Summary**: Transfer the balance of the Income Summary account to Harrison Taylor, Capital.
4. **Closing Drawing Account**: Transfer the balance of Harrison Taylor, Drawing to Harrison Taylor, Capital.

These actions ensure that all revenue and expense accounts begin the new fiscal period with a zero balance, aligning with proper accounting practices.

Remember, the correct journal entries are vital to accurately reflect the financial position and performance of the company for stakeholders.

Expert Solution

Step 1

losing entries are used to transfer the balance from a temporary to a permanent account. We can say that closing entries are used to reset the balance of the temporary account.