Explanation Record the closing entry for revenues and expenses. Date Accounts and Explanation Post Ref Debit ($) Credit ($) December 31 Merchandise Inventory (December 31) 460,000 Sales 2,220,000 Purchase Discounts 35,000 Purchase Returns and Allowances 45,000 Merchandise Inventory (January 1) 375,000 Purchases 1,760,000 Freight In 17,000 Salaries Expenses 375,000 Advertising Expenses 36,000 Depreciation Expenses 13,000 Miscellaneous Expense 9,000 P’s Capital 175,000 (1) (To close the revenue and expenses accounts.) Table (1) Working Note: Calculate the amount of P’s Capital. P's Capital = [ ( $ 460 , 000 + $ 2 , 220 , 000 + $ 35 , 000 + $ 45 , 000 ) −

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Chapter 6, Problem 6.39EX

To determine

Closing entries: These refer to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.

To Record: The closing entries of Company P.

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Chapter 6, Problem 6.38EX

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Chapter 6 Solutions

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Closing entries: These refer to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account. To Record: The closing entries of Company P.

Solution Summary: The author explains that closing entries are recorded at the end of an accounting period. They close all revenue accounts earned, and all expenses account incurred during the current accounting year.

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Closing entries: These refer to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account. To Record: The closing entries of Company P.

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