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15 November, 16:59

The company's adjusted trial balance as follows includes the following accounts balances:

Cash, $15,000;

Equipment, $85,000;

Accumulated Depreciation, $25,000;

Accounts Payable, $10,000;

Retained earnings, $63,500;

Dividends, $2,000;

Sales, $56,000;

Sales Returns and Allowances, $3,000;

Sales Discounts, $1,500;

Depreciation Expense, $25,000; and Salaries Expense, $23,000.

All accounts have normal balances.

Required:

a. Prepare closing entry #1.

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Answers (1)
  1. 15 November, 20:36
    0
    Expense & revenue summary a/c (credit balance) = $3500

    Explanation:

    1. Dr Expense & revenue summary 52500

    Cr Sales discount 1500

    Cr Sales return & allowance 3000

    Cr Depreciation expense 25000

    Cr Salaries expense 23000

    (Close expenses to expense & revenue summary a/c)

    2. Dr Sales 56000

    Cr Expense & revenue summary 56000

    (Close sales to expense & revenue summary a/c)

    3. Dr Expense & revenue summary a/c 3500

    Cr Retained earning a/c 3500

    (To close expense & revenue summary a/c)

    4. Dr Retained earning 2000

    Cr Expense & revenue summary 2000

    (Close dividend to expense & revenue summary a/c) d
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