Explanation Closing entries: Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance. Rules of Debit and Credit: Debit , the revenue account and owners capital account balance. In addition debit owners capital account if it suffer loss (net loss) Credit, the expense account, owners’ capital if it earns income (net income) and owners’ drawing account balance. Closing entry for revenue account: Date Accounts title and Explanation Post Ref. Debit ($) Credit ($) October 31 Fees Earned (OE–) 519,300 Income Summary (OE+) 519,300 (To close the revenue account ) Table (1) Description for journal entry Fees earned are a revenue account. Since the amount of revenue is closed to Income Summary account. Therefore, it is debited. Income Summary account is a temporary account. This account is credited to close the revenue value. Closing entry for expense account: Date Accounts title and Explanation Post Ref. Debit ($) Credit ($) October 31 Income Summary (OE–) 586,150 Wages Expense (OE+) 488,000 Rent Expense (OE+) 72,000 Supplies Expense (OE+) 11,900 Miscellaneous Expense (OE+) 14,250 (To close the expenses account. Table (2) Description for journal entry Income Summary account is a temporary account. This account is debited to close the expense value. Wages Expense, Rent Expense, Supplies Expense, and Miscellaneous Expense are expense accounts. Since the amount of expenses are closed to Income Summary account. Therefore, it is credited. Closing entry for transferring the income summary to owners’ capital: Date Accounts title and Explanation Post Ref. Debit ($) Credit ($) October 31 BM’s Capital (OE–) 66,850 Income Summary (OE+) 66,850 (To close balance of income summary are transferred to owners’ capital account) Table (3) Description for journal entry The balance of income summary (net income or net loss) is transferred to owners’ capital account...

14th Edition

ISBN: 9781305088436

Author: Carl Warren, Jim Reeve, Jonathan Duchac

Publisher: Cengage Learning

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Chapter 4, Problem 17E

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Journalize the closing entries for MS Company.

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Chapter 4, Problem 18E

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Chapter 4 Solutions

Financial Accounting

Ch. 4 - Prob. 1DQ Ch. 4 - Describe the nature of the assets that compose the...Ch. 4 - Prob. 3DQ Ch. 4 - Prob. 4DQ Ch. 4 - Why are closing entries required at the end of an...Ch. 4 - Prob. 6DQ Ch. 4 - What is the purpose of the post-closing trial...Ch. 4 - Prob. 8DQ Ch. 4 - Prob. 9DQ Ch. 4 - Recent fiscal years for several well-known...

Ch. 4 - The balances for the accounts that follow appear...Ch. 4 - The balances for the accounts that follow appear...Ch. 4 - Marcie Davies owns and operates Gemini Advertising...Ch. 4 - Prob. 2PEB Ch. 4 - The following accounts appear in an adjusted trial...Ch. 4 - The following accounts appear in an adjusted trial...Ch. 4 - After the accounts have been adjusted at October...Ch. 4 - After the accounts have been adjusted at April 30,...Ch. 4 - From the following list of steps in the accounting...Ch. 4 - From the following list of steps in the accounting...Ch. 4 - Balance sheet data for HQ Properties Company...Ch. 4 - Balance sheet data for Brimstone Company follows:...Ch. 4 - The balances for the accounts that follow appear...Ch. 4 - Prob. 2E Ch. 4 - Bamboo Consulting is a consulting firm owned and...Ch. 4 - Elliptical Consulting is a consulting firm owned...Ch. 4 - The following account balances were taken from the...Ch. 4 - The following revenue and expense account balances...Ch. 4 - FedEx Corporation had the following revenue and...Ch. 4 - Apex Systems Co. offers its services to residents...Ch. 4 - Selected accounts from the ledger of Restoration...Ch. 4 - Prob. 10E Ch. 4 - At the balance sheet date, a business owes a...Ch. 4 - Prob. 12E Ch. 4 - List the errors you find in the following balance...Ch. 4 - Prob. 14E Ch. 4 - Prior to its closing, Income Summary had total...Ch. 4 - After all revenue and expense accounts have been...Ch. 4 - Prob. 17E Ch. 4 - Prob. 18E Ch. 4 - An accountant prepared the following post-closing...Ch. 4 - Rearrange the following steps in the accounting...Ch. 4 - The following data (in thousands) were taken from...Ch. 4 - Prob. 22E Ch. 4 - Prob. 23E Ch. 4 - Alert Security Services Co. offers security...Ch. 4 - Alert Security Services Co. offers security...Ch. 4 - Prob. 26E Ch. 4 - Based on the data in Exercise 4-24, prepare the...Ch. 4 - Based on the data in Exercise 4-25, prepare the...Ch. 4 - Prob. 1PA Ch. 4 - Finders Investigative Services is an investigative...Ch. 4 - The unadjusted trial balance of Epicenter Laundry...Ch. 4 - The unadjusted trial balance of Lakota Freight Co....Ch. 4 - For the past several years, Steffy Lopez has...Ch. 4 - Last Chance Company offers legal consulting advice...Ch. 4 - The Gorman Group is a financial planning services...Ch. 4 - The unadjusted trial balance of La Mesa Laundry at...Ch. 4 - The unadjusted trial balance of Recessive...Ch. 4 - For the past several years, Jeff Horton has...Ch. 4 - The unadjusted trial balance of PS Music as of...Ch. 4 - Kelly Pitney began her consulting business, Kelly...Ch. 4 - Picasso Graphics is a graphics arts design...Ch. 4 - The following is an excerpt from a telephone...Ch. 4 - Prob. 3CP

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Journalize the closing entries for MS Company.

Solution Summary: The author explains how closing entries are recorded to close temporary accounts such as incomes and expenses by transferring them to permanent accounts.

Journalize the closing entries for MS Company.

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Chapter 4 Solutions