Question

Exercise 3-18A Record closing entries and prepare a post-closing trial balance (LO3-6, 3-7) Laker incorporated's fiscal year-end is December 31, 2021. The following is an adjusted trial balance as of December 31. Credit Debit $ 12,000 39,000 30,000 $ Accounts Cash Supplies Prepaid Rent Accounts Payable Notes Payable Common Stock Retained Earnings Dividends Service Revenue Salaries Expense Advertising Expense Rent Expense Utilities Expense Totals 3,000 30,000 40,000 9,000 4,000 54,000 20,000 13,000 10,000 8.000 $136,000 $136,000 Required: 1. Prepare the necessary closing entries. (If no entry Required" in the first account field.) red for a particular transaction/event, select "No Journal Entr View transaction list Journal entry worksheet 2 3 Record the entry to close the revenue accounts.

Answer 1

Solution 1:

Laker Incorporated - Journal Entries
Date	Particulars	Debit	Credit
31-Dec	Service revenue Dr	$54,000.00
	To Income summary		$54,000.00
	(To close revenue account)
31-Dec	Income summary Dr	$51,000.00
	To Salaries expense		$20,000.00
	To Advertising Expense		$13,000.00
	To Rent Expense		$10,000.00
	To Utilities Expense		$8,000.00
	(To close expense account)
31-Dec	Income summary Dr	$3,000.00
	To Retained earnings		$3,000.00
	(To close income to retained Earnings)
31-Dec	Retained Earnings Dr	$4,000.00
	To Dividends		$4,000.00
	(To close dividend account)

Solution 2:

Ending balance of retained earnings = $9,000 + $3,000 - $4,000 = $8,000

Solution 3:

Laker Incorporated
Trial Balance
Particulars	Debit	Credit
Cash	$12,000.00
Supplies	$39,000.00
Prepaid rent	$30,000.00
Accounts payable		$3,000.00
Notes payable		$30,000.00
Common stock		$40,000.00
Retained earnings		$8,000.00
Total	$81,000.00	$81,000.00