Business
Engineering
Math
Science
Social Science
Cornerstones of Financial Accounti...
Solutions
Cornerstones of Financial Accounti...
Problem 3-69A Preparation of Closing Entries and an Income Statement
Round Grove Alarm Company provides security services to homes in northwestern Indiana. At year end 2019, after adjusting entries have been made, the following list of account balances is prepared:
Required:
- Prepare closing entries for Round Grove Alarm.
- Prepare an income statement for Round Grove Alarm.
Concept Introduction:
Closing Entries: Closing entries is the process of closing temporary accounts at the end of year. Closing entries are prepared after preparing the adjusted trial balance. In the process of closing entries following steps are follows in the form of journal entries:
- Closing all revenue accounts by debiting the revenue accounts and crediting Income Summary Account.
- Closing all expenses by debiting the Income Summary accounts and crediting all expenses accounts.
- Closing the net income by debiting the Income Summary accounts and crediting Capital or Retained earrings account.
- Closing the withdrawals accounts by debiting the Capital or Retained earrings account and crediting the withdrawal account.
Requirement-1; To Prepare:
The closing entries for the year,
The closing entries for the year are explained as follows:
| Round Grove Alarm Company | |||||||||
| Closing entries | |||||||||
| For the year 2019 | |||||||||
| Date | Account Title | Debit | Credit | ||||||
| Dec. 31 | Service Revenue | $ 612,900 | |||||||
| Income Summary | $ 612,900 | ||||||||
| (Being Revenue accounts closed) | |||||||||
| Dec. 31 | Income Summary | $ 540,950 | |||||||
| Depreciation Expense | $ 45,300 | ||||||||
| Income Tax Expense | $ 30,800 | ||||||||
| Interest Expense | $ 4,800 | ||||||||
Concept Introduction:
Closing Entries: Closing entries is the process of closing temporary accounts at the end of year. Closing entries are prepared after preparing the adjusted trial balance. In the process of closing entries following steps are follows in the form of journal entries:
- Closing all revenue accounts by debiting the revenue accounts and crediting Income Summary Account.
- Closing all expenses by debiting the Income Summary accounts and crediting all expenses accounts.
- Closing the net income by debiting the Income Summary accounts and crediting Capital or Retained earrings account.
- Closing the withdrawals accounts by debiting the Capital or Retained earrings account and crediting the withdrawal account.
Requirement-2; To Prepare:
The Income statement for the year.
Chapter 3 Solutions
Additional Business Solutions
Find more solutions based on key concepts
Show solutions addHow does an enterprise system support the order-to-cash process?
Accounting Information Systems
Periodic inventory by three methods; cost of goods sold The units of an item available for sale during the year...
Financial & Managerial Accounting
Effect of omitting adjusting entry When preparing the financial statements for the month ended January 31, accr...
Corporate Financial Accounting
The Kroger Company is one of the largest grocery retailers in the United States, with over 2000 grocery stores ...
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Is the following equation correct for finding the value of a constant growth stock? Explain. P0=Dors+g
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
YOUR TASK. Search online for a speech by a significant businessperson or well-known political figure. Consider ...
Essentials of Business Communication (MindTap Course List)
Suppose Americans decide to save more of their in-comes. If banks lend this extra saving to businesses, which u...
Principles of Microeconomics (MindTap Course List)
(Corporations) How did the institution of the firm get a boost from the advent of the Industrial Revolution? Wh...
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
The problem of time inconsistency applies to fiscal policy as well as to monetary policy. Suppose the governmen...
Principles of Macroeconomics (MindTap Course List)
What is the role of the financial system? Name and describe two markets that are part of the financial system i...
Brief Principles of Macroeconomics (MindTap Course List)
RATIO ANALYSIS Data for Barry Computer Co. and its industry averages follow. The firms debt is priced at par, s...
Fundamentals of Financial Management (MindTap Course List)
What is the difference between a positive and a normative statement? Give an example of each.
Principles of Economics (MindTap Course List)
Discuss this statement: Business competition encourages improved product quality and increased customer satisfa...
Foundations of Business (MindTap Course List)
Three molecules of type A, three of type B, three of type C, and three of type D are to be linked together to f...
Probability and Statistics for Engineering and the Sciences
YIELD TO MATURITY A firms bonds have a maturity of 8 years with a 1,000 face value, have an 11% semiannual coup...
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
The units of an item available for sale during the year were as follows: There are 1,500 units of the item in t...
Financial And Managerial Accounting
Solid state storage devices require less power and provide faster data access than magnetic data-storage device...
Fundamentals of Information Systems
List and describe the three major steps in executing the project plan.
Principles of Information Security (MindTap Course List)
Define the term green computing, and state its primary goals.
Principles of Information Systems (MindTap Course List)
Consider the scenario described by the statement A customer can make many payments, but each payment is made by...
Database Systems: Design, Implementation, & Management
List the order number and order date for each order that contains an order line for a Fire Engine.
A Guide to SQL
What is a business rule, and what is its purpose in data modeling?
Database Systems: Design, Implementation, & Management
What is search engine optimization, and how is it accomplished?
Fundamentals of Information Systems
For Problems 16.24 through 16.28, using the rules discussed in this chapter, show the dimensions of the views s...
Engineering Fundamentals: An Introduction to Engineering (MindTap Course List)
When roughing a pocket, should you machine in a clockwise or counterclockwise direction, and why?
Precision Machining Technology (MindTap Course List)
State whether the following are true or false. a. Aeolian soils are transported and deposited by wind. b. Marbl...
Fundamentals of Geotechnical Engineering (MindTap Course List)
A solid steel bar of diameter d1= 25.0 mm is enclosed by a steel tube of outer diameter d3= 37.5 mm and inner d...
Mechanics of Materials (MindTap Course List)
Low fuel pump pressure causes a mixture and excessive pressure causes a mixture.
Automotive Technology: A Systems Approach (MindTap Course List)
Do research to identify a company that has gone beyond e-commerce to use information systems and networks to ac...
Principles of Information Systems (MindTap Course List)
What is risk management?
Management Of Information Security
Will online transactions eventually replace person-to-person contact? Why or why not?
Systems Analysis and Design (Shelly Cashman Series) (MindTap Course List)
A hydrometer test has the following result: Gs = 2.65, temperature of water = 26 C, and L = 10.4 cm at 45 minut...
Principles of Geotechnical Engineering (MindTap Course List)
The 60-lb homogeneous door is supported by hinges at A and B, with only the hinge at B being capable of providi...
International Edition---engineering Mechanics: Statics, 4th Edition
The symbol shown is a(n) a. iron core transformer. b. auto transformer. c. current transformer. d. air core tra...
Electric Motor Control
Two shredders are used to process nearly identical municipal solid waste. The products are sieved, and the data...
Solid Waste Engineering
You are collecting data from the literature on a compound, for which you need to know the specific internal ene...
Fundamentals of Chemical Engineering Thermodynamics (MindTap Course List)
Where in the NEC would you look for the installation requirements regarding flush and recessed lighting luminai...
EBK ELECTRICAL WIRING RESIDENTIAL
Cooling system hoses should be replaced when they are. hard (brittle) soft (spongy) swollen all of the above
Automotive Technology
The frame shown in Figure P4.7-13 is unbraced against sidesway. The columns are HSS 665 8 , and the beams are W...
Steel Design (Activate Learning with these NEW titles from Engineering!)
Many programs today use forms on a webpage as their front end. (505)
Enhanced Discovering Computers 2017 (Shelly Cashman Series) (MindTap Course List)
Solve Problem 16.2 for the loading shown in Fig. P16.2 and a settlement of 12 in. at support B. FIG. P16.12, P1...
Structural Analysis
Youve decided to run an Nmap scan on your network. What app could you open to perform this task? Choose all tha...
Network+ Guide to Networks (MindTap Course List)
