Preparation of Closing EntriesJames and Susan Morley recently converted a large turn-of-the-century house into a hotel and incorporated the business as Saginaw Enterprises. Their accountant is inexperienced and has made the following closing entries at the end of Saginaw's first year of operations:Retained Earnings 214,000 Service Revenue 181,000Accumulated Depreciation 33,000 Depreciation Expense 33,000 Income Taxes Expense 8,200 Utilities Expense 11,100 Wages Expense 66,000 Supplies Expense 31,000 Accounts Payable 4,500 Retained Earnings 153,800 Dividends Declared 3,200 Retained Earnings 3,200Required:Prepare the correct closing entries. Assume that all necessary accounts are presented above and that the amounts given are correct. If an amount box does not require an entry, leave it blank.

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Description: Preparation of Closing EntriesJames and Susan Morley recently converted a large turn-of-the-century house into a hotel and incorporated the business as Saginaw Enterprises. Their accountant is inexperienced and has made the following closing entries

Temporary accounts The accounts from which the balances are transferred to permanent accounts are…

Answered: James and Susan Morley recently…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter4: Income Measurement And Accrual Accounting

Section: Chapter Questions

Problem 4.28E

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Preparation of Closing Entries

James and Susan Morley recently converted a large turn-of-the-century house into a hotel and incorporated the business as Saginaw Enterprises. Their accountant is inexperienced and has made the following closing entries at the end of Saginaw's first year of operations:

Retained Earnings	214,000
Service Revenue		181,000
Accumulated Depreciation		33,000

Depreciation Expense	33,000
Income Taxes Expense	8,200
Utilities Expense	11,100
Wages Expense	66,000
Supplies Expense	31,000
Accounts Payable	4,500
Retained Earnings		153,800

Dividends Declared	3,200
Retained Earnings		3,200

Required:

Prepare the correct closing entries. Assume that all necessary accounts are presented above and that the amounts given are correct. If an amount box does not require an entry, leave it blank.

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