Wildhorse Store is located in midtown Madison. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company’s fiscal year on November 30, 2020, the following accounts appeared in two of its trial balances. Unadjusted Adjusted Unadjusted Adjusted Accounts Payable $25,400 $25,400 Notes payable $35,000 $35,000 Accounts Receivable 31,000 31,000 Owner’s Capital 87,400 87,400 Accumulated Depr.—Equipment 35,000 46,000 Owner’s Drawings 10,000 10,000 Cash 25,000 25,000 Prepaid Insurance 10,200 2,500 Cost of Goods Sold 508,000 508,000 Property Tax Expense 2,500 Freight-Out 5,700 5,700 Property Taxes Payable 2,500 Equipment 145,000 145,000 Rent Expense 15,000 15,000 Depreciation Expense 11,000 Salaries and Wages Expense 96,000 96,000 Insurance Expense 7,700 Sales Revenue 720,000 720,000 Interest Expense 6,000 6,000 Sales Commissions Expense 6,500 11,000 Interest Revenue 2,100 2,100 Sales Commissions Payable 4,500 Inventory 30,000 30,000 Sales Returns and Allowances 8,000 8,000 Utilities Expense 8,500 8,500 Journalize the closing entries that are necessary which are to close accounts with credit balances, to close accounts with debit balances, to close net income or loss, and to close drawings.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
The question:
Wildhorse Store is located in midtown Madison. During the past several years, net income has been declining because of suburban shopping centers. At the end of the company’s fiscal year on November 30, 2020, the following accounts appeared in two of its
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Unadjusted
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Adjusted
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Unadjusted
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Adjusted
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| Accounts Payable | $25,400 | $25,400 | Notes payable | $35,000 | $35,000 | |||||
| 31,000 | 31,000 | Owner’s Capital | 87,400 | 87,400 | ||||||
| Accumulated Depr.—Equipment | 35,000 | 46,000 | Owner’s Drawings | 10,000 | 10,000 | |||||
| Cash | 25,000 | 25,000 | Prepaid Insurance | 10,200 | 2,500 | |||||
| Cost of Goods Sold | 508,000 | 508,000 | Property Tax Expense | 2,500 | ||||||
| Freight-Out | 5,700 | 5,700 | Property Taxes Payable | 2,500 | ||||||
| Equipment | 145,000 | 145,000 | Rent Expense | 15,000 | 15,000 | |||||
| 11,000 | Salaries and Wages Expense | 96,000 | 96,000 | |||||||
| Insurance Expense | 7,700 | Sales Revenue | 720,000 | 720,000 | ||||||
| Interest Expense | 6,000 | 6,000 | Sales Commissions Expense | 6,500 | 11,000 | |||||
| Interest Revenue | 2,100 | 2,100 | Sales Commissions Payable | 4,500 | ||||||
| Inventory | 30,000 | 30,000 | Sales Returns and Allowances | 8,000 | 8,000 | |||||
| Utilities Expense | 8,500 | 8,500 |
Journalize the closing entries that are necessary which are to close accounts with credit balances, to close accounts with debit balances, to close net income or loss, and to close drawings.
The answer that I have given in the photo was partially correct. I did the answer but the answer in the red box was wrong.
May I know what is the correct answer and which part that I did missed out? Thank you for helping me.
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