Closing entries Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts such as retained earnings. It is passed at the end of the accounting period, to transfer the final balance. Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions: Debit , all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities. Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease To Journalize: The closing entries.

Question

Want to see the full answer?

Answer 1

Question

Chapter 4, Problem 4.16EX

To determine

Closing entries

Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts such as retained earnings. It is passed at the end of the accounting period, to transfer the final balance.

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease

To Journalize: The closing entries.

To determine

The amount of retained earnings at the end of the period.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $2,450,000 and a credit of $3,000,000. At the same date, Retained Earnings has a credit balance of $8,222,600, and Dividends has a balance of $125,000. Required: A. Journalize the entries required to complete the closing of the accounts on December 31. Refer to the Chart of Accounts for exact wording of account titles. B. Determine the amount of Retained Earnings at the end of the period. CHART OF ACCOUNTS General Ledger ASSETS 11 Cash 12 Accounts Receivable 13 Prepaid Insurance 14 Supplies 15 Land 16 Building 17 Accumulated Depreciation-Building 18 Equipment 19 Accumulated Depreciation-Equipment LIABILITIES 21 Accounts Payable 22 Salaries and Wages Payable 23 Unearned Rent EQUITY 31 Common Stock 32 Retained Earnings 33 Dividends 34 Income Summary REVENUE 41 Fees Earned…

Closing entries with net income After all revenue and expense accounts have been closed at the end of t he fiscal year, Income Summary has a debit of $2,450,000 and a credit of $3,000,000. At the same date, Retained Earnings has a credit balance of $8,222,600 and Dividends has a balance of $125,000. (A) Journalize the entries required to complete the closing of the accounts. (B) Determine the amount of Retained. Earnings at me end of the period.

Preparing and Analyzing Closing Entries At December 31, the ledger of Aulani Company includes the following accounts, all having normal balances: Sales Revenue, $59,800; Cost of Goods Sold, $31,400; Retained Earnings, $20,000; Interest Expense, $3,200; Dividends (declared and paid), $5,000; Wages Expense, $8,000, and Interest Payable, $2,100. Required: Prepare the closing entries for Aulani at December 31. If an amount box does not require an entry, leave it blank. How does the closing process affect Aulani's retained earnings?