To determine Prepare the closing entries as at December 31. Explanation Closing entries: The journal entries prepared to close the temporary accounts to Retained Earnings account are referred to as closing entries. The revenue, expense, and dividends accounts are referred to as temporary accounts because the information and figures in these accounts is held temporarily and consequently transferred to permanent account at the end of accounting year. Prepare the closing entry for revenue accounts. Date Accounts title and explanation Post Ref. Debit ($) Credit ($) December 31 Service revenue 13,000 Income summary account 13,000 ( To close the revenues account ) Table (1) In this closing entry, service revenue accounts is closed by transferring the amount of revenue account to the income summary account in order to bring the revenue account balance to zero. Hence, debit the service revenue account and credit income summary account. Prepare the closing entry for expenses account. Date Accounts title and explanation Post Ref. Debit ($) Credit ($) December 31 Income summary 10,000 Wages expense 8,400 Rent expense 1,600 ( To close the expenses account ) Table (2) In this closing entry, expenses account is closed by transferring the amount of expenses to the income summary in order to bring the expenses account balance to zero. Hence, debit the income summary account and credit all expenses account. Prepare closing entry for income summary account. Date Accounts title and explanation Post Ref. Debit ($) Credit ($) December 31 Income Summary 3,000 Retained Earnings 3,000 ( To close the income summary account ) Table (3) Closing entry of income summary account: On December 31, total revenues are $115,100 and total expenses are $110,800...

Connect Access Card For Financial Accounting Fundamentals

7th Edition

ISBN: 9781260482829

Author: John J Wild

Publisher: McGraw-Hill Education

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Chapter 3, Problem 21QS

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Prepare the closing entries as at December 31.

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Chapter 3, Problem 20QS

Chapter 3, Problem 22QS

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Kubin Company’s relevant range of production is 11,000 to 14,000 units. When it produces and sells 12,500 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.20 Direct labor $ 4.20 Variable manufacturing overhead $ 1.70 Fixed manufacturing overhead $ 5.20 Fixed selling expense $ 3.70 Fixed administrative expense $ 2.70 Sales commissions $ 1.20 Variable administrative expense $ 0.70 Required: For financial accounting purposes, what is the total product cost incurred to make 12,500 units? For financial accounting purposes, what is the total period cost incurred to sell 12,500 units? For financial accounting purposes, what is the total product cost incurred to make 14,000 units? For financial accounting purposes, what is the total period cost incurred to sell 11,000 units?

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Chapter 3 Solutions

Connect Access Card For Financial Accounting Fundamentals

Ch. 3 - Prob. 1MCQ Ch. 3 - 2. Prior to recording adjusting entries, the...Ch. 3 - Prob. 3MCQ Ch. 3 - Prob. 4MCQ Ch. 3 - Prob. 5MCQ Ch. 3 - Prob. 1DQ Ch. 3 - Prob. 2DQ Ch. 3 - Prob. 3DQ Ch. 3 - Prob. 4DQ Ch. 3 - Prob. 5DQ

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