Question

The ledger of Swann Company contains the following balances:

D. Swann, Capital $30,000; D. Swann, Drawing $2,000; Service Revenue $50,000; Salaries Expense $27,000; and Supplies Expense $4,000.

• Prepare the closing entries at December 31.
• post-closing entries.

Answer 1

30,000 Beginning Capital balance

1 - To close the revenue account
Dr Service Revenue 50,000
Cr Income Summary 50,000

2 - To close the expense accounts
Dr Income Summary 31,000
Cr Salaries Expense 27,000
Cr Supplies Expense 4,000

3 - To close income summary
Dr Income Summary 19,000
Cr Capital, D. Swann 19,000

4 - To close drawings
Dr Capital, D. Swann 2,000
Cr Drawing, D. Swann 2,000

$47,000 Ending capital balance