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:
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:
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:
Requirement-2; To Prepare:
The Income statement for the year.
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