Question

Plumlee Corporation has the following account balances at December 31, 2017

Debit Credit

Services Fees Earned $92,500 cr

Interest Income 2,200 cr

Salaries Expense $41,800 debit

Advertising Expense 4,300 debit

Depreciation Expense 8,700 debit

Income Tax Expense 9,900 debit

Retained Earnings 42,700 cr

Prepare entries to close these accounts in journal entry form. Set up T-accounts for each of the ledger accounts and post the entries to them. After these entries are posted, what is the balance of the Retained Earnings account?

a. $42, 700

b. $72,700

c. $12,700

d. $137,400

Answer 1

Answer

b. $72,700

All Amounts in $

Journal Entry

Bank A/c Dr             92500

       To    Service Fees                92500

Bank A/c dr                2200

To Interest                          2200

Salary A/c               41800

To Bank                       41800

Advertising Expense Dr 4300

To Bank A/c                        4300

Depreciation A/c Dr     8700

To Asset    8700

Income Tax A/c Dr   9900

To Bank A/c 9900

	Bank A/c
Service Revenue A/c	92500	Salary	41800
Interest	2200	Advertising Expense	4300
		Income Tax	9900
		Profit&loss	38700
	94700		94700

	Advertising Expense
Bank	4300	Profit&loss	4300
	4300		4300

	Service Revenue A/c
Profit&loss	92500	Bank	92500
	92500		92500

	Interest A/c
Profit&loss	2200	Bank	2200

	Salary A/c
Bank	41800	Profit&loss	41800
	41800		41800

	Depreciation
Asset A/c	8700	Profit&loss	8700
	8700		8700

	Income Tax
Bank	9900	Profit&loss	9900
	9900		9900

Profit andLoss
Income
Interest A/c	2200
Service Revenue A/c	92500
	94700
Expense
Advertising Expense	4300
Salary A/c	41800
Depreciation	8700
Income Tax	9900
	64700
Net Income Trsfer to Retained Earnings	30000

Opening Retained Earnings	42700
Add: Crrent Year year Retained Earnings	30000
Closing	72700