Question

The income statement for the Windsor, Inc. for the month ended July 31 shows Service Revenue $18,760, Salaries and Wages Expense $9,350, Maintenance and Repairs Expense $2,970, and Income Tax Expense $1,360. The statement of retained earnings shows an opening balance for Retained Earnings of $21,890 and Dividends $1,610. (a) Prepare closing journal entries. (If no entry is required, select "No Entry" for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit July 31 (To close revenue account) July 31 (To close expense accounts) July 31

Answer 1

Answer: Credit Date July 31 Debit 18,760 18,760 July 31 13,680 Accounts Titles & Explanation Revenue Income Summary (To close revenue account) Income Summary Salaries and Wages Expense Maintenance and Repairs Expense Income Tax Expense (To close expense account) Income Summary Retained Earnings (to close net income/(loss) to retained earnings) Retained Earnings Dividends (to close dividends to retained earnings) 9,350 2,970 1,360 July 31 5,080 5,080 July 31 1,610 1,610 Calculation: Closing balance of Retained Earnings = Opening Balance of Retained Earning + Income - Dividend Closing balance of Retained Earnings = $21,890 + $5,080 - $1,610 Closing balance of Retained Earnings = $25,360