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Accounting (Text Only)
Closing entries; net income
Based on the data presented in Exercise 6-23, journalize the closing entries.
Closing entries: These refer to the journal entries that are recorded at the end of an each accounting period. It closes all revenue accounts earned, and all expenses account incurred during the current accounting year to the company’s capital account.
To Record: The closing entries of Company P.
Record the closing entry for revenues and expenses.
| Date | Accounts and Explanation | Post Ref | Debit ($) | Credit ($) |
| October 31 | Sales | 6,410,000 | ||
| Â Â Â Â Â Â Â Cost of Merchandise Sold | 3,800,000 | |||
| Â Â Â Â Â Â Â Selling Expenses | 715,000 | |||
| Â Â Â Â Â Â Â Administrative Expenses | 540,000 | |||
| Â Â Â Â Â Â Â Interest Expense | 10,000 | |||
|        J’s Capital | 1,345,000 (1) | |||
| (To close the revenue and expenses accounts.) |
Table (1)
Working Note:
Calculate the amount of J’s Capital.
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