Question

The Sky Blue Corporation has the following adjusted trial balance at December 31.
Debit Credit
Cash $1,330
Accounts Receivable 3,000
Prepaid Insurance 3,300
Notes Receivable
(long-term) 4,000
Equipment 13,000
Accumulated Depreciation $3,600
Accounts Payable 5,920
Salaries and Wages Payable 1,100
Income Taxes Payable 3,900
Unearned Revenue 700
Common Stock 3,400
Retained Earnings 1,100
Dividends 400
Sales Revenue 47,330
Rent Revenue 400
Salaries and Wages
Expense 22,600
Depreciation Expense 1,800
Utilities Expense 5,220
Insurance Expense 1,900
Rent Expense 7,000
Income Tax Expense 3,900
Total $67,450 $67,450
1. Prepare closing journal entries on December 31.
2. Record the closing entry for revenues and expenses. Record the closing entry for dividends.

Answer 1

Answer:

                       Sky Blue Corporation Closing Entries

ACCOUNTS & EXPLANATION                DEBIT        CREDIT

                                                                        $                  $

Sales revenue                                            47,330  

Rent revenue                                              400

Income summary a/c                                                       47,730

(To record close of revenue account)

Income summary account                         42,420  

Salaries and wages expenses                                         22,600

Depreciation expenses                                                     1,800

Utilities expenses                                                              5,220

Insurance expenses                                                          1,900

Rent expenses                                                                   7,000

Income tax expenses                                                         3,900

(To record close of expenses account)

 

Income summary account                                   5310  

Retained earnings account                                                  5310

(To record close of income summary account)

 

Retained earnings account                                  400  

Income summary account                                                     400

(To record close of dividend a/c)