Question

Automation Services Co. offers its services to companies desiring to use technology to improve their operations. After the accounts have been adjusted at December 31, the end of the fiscal year, the following balances were taken from the ledger of Automation Services: Fees Earned $614,500 Dividends 45,000 Rent Expense 140,000 Retained Earnings 3,250,000 Supplies Expense 18,200 Wages Expense 320,000 Miscellaneous Expense 8,700 Journalize the closing entries. If an amount box does not require an entry, leave it blank.

Answer 1

Answer:

Fees Earned $614,500

Fees Earned $614,500 (debit)

Profit and Loss $614,500 (credit)

Dividends 45,000

Shareholders Equity $45,000 (debit)

Dividends $45,000 (credit)

Rent Expense 140,000

Profit and Loss $140,000 (debit)

Rent Expense $140,000 (credit)

Retained Earnings 3,250,000

Retained Earnings $ 3,250,000 (debit)

Shareholders Equity $3,250,000 (credit)

Supplies Expense 18,200

Profit and Loss $ 18,200 (debit)

Supplies Expense 18,200 (credit)

Wages Expense 320,000

Profit and Loss $ 320,000 (debit)

Wages Expense $ 320,000 (credit)

Miscellaneous Expense 8,700

Profit and Loss $8,700 (debit)

Miscellaneous Expense $ 8,700 (credit)

Explanation:

Fees Earned $614,500

Close off income to Profit and loss Account

Dividends 45,000

Close off to Shareholders Equity

Rent Expense 140,000

Close off expense to Profit and loss Account

Retained Earnings 3,250,000

Close off to Shareholders Equity in Retained Earning Reserve

Supplies Expense 18,200

Close off expense to Profit and loss Account

Wages Expense 320,000

Close off expense to Profit and loss Account

Miscellaneous Expense 8,700

Close off expense to Profit and loss Account