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30 May, 19:30

Sunland Consulting has year-end account balances of Sales Revenue $537,400, Interest Revenue $2,800, Salary and Wages Expense $240,200, Rent Expense $135,000, Administrative Expense $69,500, Income Tax Expense $37,600, and Dividends $34,200. Prepare the year-end closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

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  1. 30 May, 23:18
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    Dr. Sales Revenue $537,400

    Dr. Interest Revenue $2,800

    Cr. Income Summary $540,200

    Dr. Income Summary $482,300

    Cr. Salary and Wages Expense $240,200

    Cr. Rent Expense $135,000

    Cr. Administrative Expense $69,500

    Cr. Income Tax Expense $37,600

    Dr. Retained Earning $34,200

    Cr. Dividends $34,200

    Explanation:

    All the revenue and Expenses account are closed in Income summary account. The revenue accounts have credit nature, to adjust these account we need to debit these account by the outstanding balances. The expense accounts have debit nature, to adjust these account we need to credit these account by the outstanding balances.

    Balance in the Income summary account after posting all adjustments is transferred to owner's capital account.
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