Question

Data Table Cash 3,900 26,000 7,200 3,300 1.700 2,700 1,900 Common Stock Retained Earnings, January 1 Dividends Service Revenue Depreciation Expense-Equipment Salaries Expense Accounts Receivable Prepaid Rent Office Supplies Equipment Accumulated Depreciation-Equipment Accounts Payable Notes Payable (long-term) 2,300 34,500 100 spense Utilities Expense / / Print Dono /

Answer 1

Ans. 14	First of all all revenues and expenses are closed to income summary account.
	Then the net loss is closed to retained earnings account and finally
	dividends are closed to retained earnings account.
	We can use retained earnings account rather than income summary.
Date	Accounts	Debit	Credit
31-Dec	Service revenue	$2,300
	Income summary		$2,300
	(To close revenue accounts)
31-Dec	Income summary	$3,100
	Depreciation expense - Equipment		$100
	Salaries expense		$700
	Rent expense		$300
	Utilities expense		$1,200
	Supplies expense		$800
	(To close expenses accounts)
31-Dec	Retained earnings	$800
	Income summary		$800
	(To close net loss)
31-Dec	Retained earnings	$1,900
	Dividends		$1,900
	(To close the dividends account)
	*Calculations of Net Income or Loss :
	Particulars	Amount	Amount
	Service revenue	$2,300
	Total revenue (a)		$2,300
	Less: Expenses:
	Depreciation expense - Equipment	$100
	Salaries expense	$700
	Rent expense	$300
	Utilities expense	$1,200
	Supplies expense	$800
	Total expenses (b)		$3,100
	Net Loss (a - b)		($800)
Ans. 15	T Account of Retained Earnings is as follows:
	Retained Earnings Account
	Particulars	Amount	Particulars	Amount
	Net loss	$800	Beginning balance	$7,200
	Dividends declared	$900
	Ending balance (balancing figure)	$5,500
		$7,200		$7,200
	*Net loss and dividends are subtracted from beginning balance of retained earnings to
	calculate the ending balance of retained earnings.