Question

The following information is from the Income Statement of Indigo’s Halloween Pop-up Rental Shop for the year ending October 31, 2022:

Service Revenue				$11,400
Expenses
Salaries and Wages expense		$3,000
Rent Expense		1,540
Depreciation Expense		1,890
Miscellaneous Expense		306
Total expenses				6,736
Net Income				$4,664

This is Indigo’s first year in business. Indigo’s distributed dividends of $2,500 during the period. Prepare closing entries at December 31, 2022. (Credit account titles are automatically indented when the 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.)

No.	Account Titles and Explanation	Debit	Credit
1.	enter an account title to close revenue accounts	enter a debit amount	enter a credit amount
	enter an account title to close revenue accounts	enter a debit amount	enter a credit amount
2.	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
	enter an account title to close expense accounts	enter a debit amount	enter a credit amount
3.	enter an account title to close net income / (loss)	enter a debit amount	enter a credit amount
	enter an account title to close net income / (loss)	enter a debit amount	enter a credit amount
4.	enter an account title to close dividends account	enter a debit amount	enter a credit amount
	enter an account title to close dividends account	enter a debit amount	enter a credit amount

Answer 1

Credit No 1 Account Titles and Explanation Service Revenue Income Summary Debit $ 11,400 $ 11,400 $ 6,736 Income Summary Salaries and Wages Expense Rent Expense Depreciation Expense Miscellenious Expense $ $ $ $ 3,000 1,540 1.890 306 3 S 4.664 Income summery Retained earnings S 4,664 4 $ 2,500 Retained Earnings Dividends $ 2,500