Explanation Closing entries: Closing entries are those journal entries , which are passed to transfer the final balances of temporary accounts, (all revenues account, all expenses account and dividend) to the income summary account. These are passed at the end of the accounting period to transfer the final balances of the temporary accounts. In other words, the closing entries transfer the net income, or net loss, and dividends to the retained earnings account. The closing entries of Company R for August 31, 2017 are as follows: Closing entry for revenue account. Date Accounts title and Description Debit ($) Credit ($) August 31 Service revenue 34,600 Rent revenue 13,100 Income summary 47,700 (To record the closure of revenues account ) Description: Service revenue, and rent revenue has a normal credit balance of $47,700 in total, now to close this account, the service revenue account, and the rent revenue account must be debited with $47,700 and, income summary account must be credited with $47,700. In this closing entry, the service revenue account, and the rent revenue account balance is being transferred to the income summary account, to bring the revenues account balance to zero. Thereby, the income summary account balance gets increased by $47,700 and, the revenue account balance gets decreased by $47,700. Closing entry for expenses account. Date Accounts title and Description Debit ($) Credit ($) August 31 Income summary 33,600 Salaries and wages Expense 18,100 Rent Expense 10,800 Depreciation Expense 1,200 Insurance Expense 1,500 Supplies Expense 2,000 (To record the closure of expense account to income summary) Description: All expenses accounts have a normal debit balance, the total of expenses are $33,600 have to be closed by transferring these account balances to the income summary account. All expenses account must be credited, and the income summary account must be debited with $33,600. In this closing entry, all the expenses account balances are transferred to the income summary account, to bring the expenses account balances to zero. Thereby, both the income summary account, and the expenses account balances get decreased by $33,600...

Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book

6th Edition

ISBN: 9781119191674

Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso

Publisher: WILEY

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Chapter 4, Problem 23E

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Prepare the closing entries of Company R.

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Chapter 4, Problem 22E

Chapter 4, Problem 2AP

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What is the amount of ending inventory?

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Chapter 4 Solutions

Accounting, Binder Ready Version: Tools for Business Decision Making - Standalone book

Ch. 4 - Prob. 1Q Ch. 4 - Prob. 2Q Ch. 4 - Prob. 3Q Ch. 4 - Prob. 4Q Ch. 4 - Prob. 5Q Ch. 4 - Prob. 6Q Ch. 4 - Prob. 7Q Ch. 4 - Prob. 8Q Ch. 4 - Prob. 9Q Ch. 4 - Prob. 10Q

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