Question

BensonBenson

Auto Repair had the following account balances after adjustments. Assume all accounts had normal balances.

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​(Click the icon to view the account​ balances.)14. Prepare the closing entries for

BensonBenson

at

DecemberDecember

3131.

15. What is the balance of Retained Earnings after closing entries have been​ recorded? (Use a​ T-account to determine the​ balance.)

14. Prepare the closing entries for

BensonBenson

at

DecemberDecember

3131.

​(Record debits​ first, then credits. Select the explanation on the last line of the journal entry​ table.)

First we will close the Service Revenue account.

Date			Accounts and Explanation	Debit	Credit
Clos. (1)

Next we will close the expense accounts.

Date			Accounts and Explanation	Debit	Credit
Clos. (2)

Now we will close the Income Summary account.

Date			Accounts and Explanation	Debit	Credit
Clos. (3)

Finally close the Dividends account.

Date			Accounts and Explanation	Debit	Credit
Clos. (4)

15. What is the balance of Retained Earnings after closing entries have been​ recorded? (Use a​ T-account to determine the​ balance.) Use​ "Clos." and the corresponding number as shown in the journal entry as posting

referenceslong dash—​"Clos.(1)",

​"Clos.(2)", etc. The adjusted balance of this account has been entered for you. Post any closing entries to this account and then calculate the​ post-closing balance​ ("Bal.") of the account.

Retained Earnings
			15,700	Bal.

Choose from any list or enter any number in the input fields and then continue to the next question.

Cash

$4,000

Common Stock

$20,000

Accounts Receivable

3,200

Retained Earnings, January 1

15,700

Prepaid Rent

1,900

Dividends

2,100

Office Supplies

3,000

Service Revenue

1,600

Equipment

34,800

Depreciation Expense—Equipment

300

Accumulated Depreciation—Equipment

1,600

Salaries Expense

800

Accounts Payable

5,400

Rent Expense

500

Notes Payable (long-term)

7,000

Utilities Expense

600

Supplies Expense

100

Answer 1

Journal Entries Date Account Title and Explaination Debit Credit Post. Ref. $ 1,600.00 Service Revenue Income Summary (To Close all Revenue Accounts) $ 1,600.00 2,300.00 Income Summary Depreciation Expense - Equipment Salaries Expense Rent Expense Utilities Expense Supplies Expense (To Close all Expenses accounts) 300.00 800.00 500.00 600.00 100.00 700.00 Retained Earnings Income Summary (To Close Income Summary to Retained Earnings) 700.00 2,100.00 Retained Earninngs Dividends (To record Close Dividends) 2,100.00

Determination of Balance in Retained Earnings: Balance at Jan.1 $ 15,700.00 Less: Net Loss During the Year $ (700.00) $15,000.00 Less:Dividends $ (2,100.00) Retained Earnings at Dec.31 $ 12,900.00