Question

E5-23 (similar to) 

Budget Office Systems uses a perpetual inventory system. The adjusted trial balance of Budget Office Systems at March 31, 2018, follows: 

 Requirement

 1. Journalize the required closing entries at March 31, 2018. 

Answer 1

Budget Office Systems
Post Closing Entries March 31st,2018
Account Title and Explanation	Debit	Credit
Sales Revenue	$    2,38,000.00
To Income Summary		$             2,38,000.00
Being amount of Sales revenue transferred to Income summary account)
Income Summary	$    1,51,100.00
To Cost of goods sold		$             1,07,100.00
To Selling Expense		$               26,700.00
To Administrative Expense		$               14,900.00
To Interest Expense		$                 2,400.00
(Expenses transferred to Income Summary Account)
Retained	$       44,000.00
To Dividend		$               44,000.00
(Being amount of Dividend transferred to Retained Earnings Account)
Income Summary($238000-$151100)	$       86,900.00
To Retained Earnings		$               86,900.00
(Being Income transferred to retained earnings account)
Income Summary Account
Account Title	Debit	Account Title	Credit
To Cost of goods sold	$    1,07,100.00	By Sales Revenue	$    2,38,000.00
To Selling Expenses	$       26,700.00
To Administrative Expenses	$       14,900.00
To Interest Expense	$         2,400.00
To Retained Earnings	$       86,900.00
Total	$    2,38,000.00	Total	$    2,38,000.00
Dividends Account
Account Title	Debit	Account Title	Credit
To Balance b/d	$       44,000.00	By Retained Earnings	$       44,000.00
Total	$       44,000.00	Total	$       44,000.00
Retained Earnings
Account Title	Debit	Account Title	Credit
To Dividends	$       44,000.00	By Balance b/d	$         8,250.00
To Balance c/d	$       51,150.00	By Income Summary	$       86,900.00
Total	$       95,150.00	Total	$       95,150.00
Budget's Net Income=$86900
Budget Office Systems
Post Closing Trial Balance
March 31st,2018
Account Name	Debit	Credit
Cash	$            3,800.00
Accounts Receivable	$          13,200.00
Merchandise Inventory	$          31,600.00
Office Supplies	$            6,600.00
Equipment	$          42,200.00
Accumulated Depreciation- Equipment		$                     13,700.00
Accounts Payable		$                       9,600.00
Salaries Payable		$                           550.00
Notes Payable		$                       7,400.00
Common Stock		$                     15,000.00
Retained Earnings		$                     51,150.00
Total	$          97,400.00	$                     97,400.00