Prepare closing entries. Please be sure to show how you got your answer. The income statement for the Flounder Golf Club Inc. for the month ended July 31 shows Service Revenue $19,150, Salariesand Wages Expense $9,160, Maintenance and Repairs Expense $3,200, and Income Tax Expense $1,280. The statement ofretained earnings shows an opening balance for Retained Earnings of $20,570 and Dividends $1,770. Date Account Titles and Explanationuly31uly31uly31uly31Service RevenueIncome Summary(To close revenue account)Income SummarySalarles and Wages ExpenseMaintenance and Repairs ExpenseIncome Tax Expense(To close expense accounts)Income SummaryRetained Earnings(To close net income to retained earnings)Retained EarningsDividends(To close dividends to retained earnings)Debit19,15013,640DO20,5701,770Credit19,1509,1603,2001,28020,5701,770

Answered: The income statement for the Flounder…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prepare closing entries. Please be sure to show how you got your answer.

The income statement for the Flounder Golf Club Inc. for the month ended July 31 shows Service Revenue $19,150, Salaries
and Wages Expense $9,160, Maintenance and Repairs Expense $3,200, and Income Tax Expense $1,280. The statement of
retained earnings shows an opening balance for Retained Earnings of $20,570 and Dividends $1,770.

Date Account Titles and Explanation
uly
31
uly
31
uly
31
uly
31
Service Revenue
Income Summary
(To close revenue account)
Income Summary
Salarles and Wages Expense
Maintenance and Repairs Expense
Income Tax Expense
(To close expense accounts)
Income Summary
Retained Earnings
(To close net income to retained earnings)
Retained Earnings
Dividends
(To close dividends to retained earnings)
Debit
19,150
13,640
DO
20,570
1,770
Credit
19,150
9,160
3,200
1,280
20,570
1,770

Expert Solution

Step 1

For first entry, service revenue of $19,150 is given in question is to be transferred to income summary.

For second entry, all expense accounts are given in question and total of all expense accounts are transferred to income summary (i.e., $9,160+$3,200+$1,280 = $13,640)

For third entry, net income i.e., balance in income summary is transferred to retained earnings.

Net income = Revenue - Expenses = $19,150 - $13,640 = $5,510

For fourth entry, dividend of $1,770 is given in question is to be transferred to retained earnings.

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