The income statement for Ayayai Golf Club for the month ending July 31 shows Service Revenue $15,400, Salaries and Wages Expense $7,500, Maintenance and Repairs Expense $1,500, and Net Income $6,400. Prepare the entries to close the revenue and expense accounts.

Solution:

Date Accounts Titles & Explanation Debit Credit

Jul-31 Service Revenue 15400

Income Statement 15400

Jul-31 Income Statement 9000

Salaries & Wages expense 7500

maintenance & Repairs expense 1500

Service Revenue

Date Explanation Debit Credit Balance

31-Jul Balance 15400 15400

31-Jul Closing entry 15400 0

Salary & Wages expense

Date Explanation Debit Credit Balance

31-Jul Balance 7500 7500

31-Jul Closing entry 7500 0

Maintenance & Repairs expense

Date Explanation Debit Credit Balance

31-Jul Balance 1500 1500

31-Jul Closing entry 1500 0