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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

Using the spreadsheet provided on page 594 for Yoder’s Cool Stuff, prepare the closing entries.

To determine

Prepare closing entries for Company YCS.

Explanation

Closing entries: The journal entries prepared to close the temporary accounts to Retained Earnings account are referred to as closing entries. The revenue, expense, and dividends accounts are referred to as temporary accounts because the information and figures in these accounts is held temporarily and consequently transferred to permanent account at the end of accounting year.

Prepare closing entries for Company YCS.

DateAccount titles and ExplanationDebitCredit
December 31Sales$261,000
     Income summary$261,000
(To close revenue accounts)
December 31Income summary$221,700
     Sales returns and allowances$21,000
     Purchases$160,000
     Wages expense

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