Question

Presented below is information related to Coronado Corporation for the month of January 2020.
Cost of goods sold $221,450 Salaries and wages expense $62,960
Delivery expense 6,300 Sales discounts 8,320
Insurance expense 11,900 Sales returns and allowances 12,540
Rent expense 18,370
Sales revenue 364,700
Prepare the necessary closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.)

Answer 1

Answer:

1.

Cost of Goods Sold $221,450 (debit)

Trading Account $221,450 (credit)

2.

Salaries and Wages $62,960 (debit)

Income Statement $62,960 (credit)

3.

Delivery Expenses $6,300 (debit)

Income Statement $6,300 (credit)

4.

Sales Revenue $8,320 (debit)

Sales Discounts $8,320 (credit)

5.

Insurance expense $11,900 (debit)

Income Statement $11,900 (credit)

6

Sales Revenue $12,540 (debit)

Sales returns and allowances $12,540 (credit)

7.

Rent expense $18,370  (debit)

Income Statement $18,370 (credit)

8.

Income Statement $364,700 (debit)

Sales revenue $364,700 (credit)

Explanation:

When Closing entries it is important to first close contra entries to their respective ledger accounts. Such contra entries include Sales Returns closed off to Sales Account.

Then the ledger accounts are closed off to financial statements.