Question

American Chip Corporation’s fiscal year-end is December 31. The following is a partial adjusted trial balance as of December 31, 2018.

Account Title	Debits			Credits
Retained earnings					84,000
Sales revenue					790,000
Interest revenue					5,000
Cost of goods sold		440,000
Salaries expense		140,000
Rent expense		19,000
Depreciation expense		34,000
Interest expense		5,400
Insurance expense		6,400

Required:
Prepare the necessary closing entries at December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
  

• 1

  Record the entry to close the revenue accounts using the income summary.

• 2

  Record the entry to close the expense accounts using the income summary.

• 3

  Record the entry to close the income summary account.

Answer 1

Title	Debit	Credit
Sales revenue	$ 790,000
Interest revenue	$      5,000
Income summary		$ 795,000
(To close revenue accounts)
Income summary	$ 644,800
Cost of goods sold		$ 440,000
Salaries expense		$ 140,000
Rent expense		$    19,000
Depreciation expense		$    34,000
Interest expense		$      5,400
Insurance expense		$      6,400
(To close expense accounts)
Income summary ($795,000-$644,800)	$ 150,200
Retained earnings		$ 150,200
(To close income summary account)

You can reach me over comment box if you have any doubts. Please rate this answer