Question

Prepare the closing journal entries. Assume the company uses the income summary account (do not post)

SPORTS RUS Retained Earnings Statement For Month Ended June 30.2019 Beginning Retained Earnings, $ 35,500 Add: Net Income $ 7.850 Subtotal Less: Dividends declared $ 2.500 Ending Retained Earnings $ 40,850 $ 43,350 SPORTS RUS Income Statement For Month Ended June 30.2019 Revenues: Service Revenue $ 24.250 Sales Revenue $ 13.500 Total Revenues $ 37,750 Operating Expenses: Cost of goods sold $ 9,200 Rent Expense $ 2.900 Telephone Expense $ 650 Salaries Expense $ 10.050 Office Supplies Expense $ 3,500 Interest Expense $ 600 Insurance Expense $ 200 Depreciation Expense $ 2,800 Total Expenses $ 29,900 Net Income S 7,850 $ 55.000 $ 12.500 S 11.450 $ S 3.200 $ 11,050 $ 106,000 -$ 25,800 $ 173,400 SPORTS RUS Balance sheet As at June 30.2019 Assets: Cash Accounts Receivable Prepaid Insurance Office Supplies Merchandise Inventory Property.plant and Equipment Less:Accumulated Depreciation Total Assets Liabilities: Accounts Payable Unearned Revenue Salaries Payable Interest Payable Bank Loan Total Liabilities Stockholders Equity: Common Stock Retained Earnings Total Stockholders' Equity Total Liabilities and Stockholders' Equity S 32.750 $ 4.200 $ 4,300 $ 300 $ 21,000 $ 62,550 S $ 70,000 $ 40.850 $ 110,850 $ 173,400

Answer 1

Solution:
	Closing entry for revenue
Journal Entries
Date	Account Title and explanation	Debit	Credit
June. 30	Service Revenue	$                    24,250
	Sales Revenue	$                    13,500
	Income Summary		$                      37,750
	(To close the revenue account)
	Closing entry for Expenses
June. 30	Income Summary	$                    29,900
	Cost of Goods Sold		$                        9,200
	Rent Expenses		$                        2,900
	Telephone Expenses		$                            650
	Salaries Expenses		$                      10,050
	Office Supplies Expenses		$                        3,500
	Interest Expenses		$                            600
	Insurance Expenses		$                            200
	Depreciation Expenses		$                        2,800
	(To Close Expenses accounts)
	Closing entries for Income summary
June. 30	Income Summary	$                       7,850
	Retained Earnings		$                        7,850
	(To Close the income Summary and transferred to retained Earnings)
	Closing entries for Dividend
June. 30	Retained Earnings	$                       2,500
	Dividends		$                        2,500
	(To Close the Dividend to Retained Earnings)