Question

The income statement for the Sage Hill Inc. for the month ended July 31 shows Service Revenue $19,040, Salaries and Wages Expense $9,460, Maintenance and Repairs Expense $2,930, and Income Tax Expense $1,300. The statement of retained earnings shows an opening balance for Retained Earnings of $24,810 and Dividends $1,760. Prepare closing journal entries. (If no entry is required, select "No Entry" for the account titles and enter O for the omounts. 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)

Answer 1

Date	Account Titles and Explanation	Debit	Credit
July 31	Service Revenue	19040
	Income Summary		19040
	(To close revenue account)
July 31	Income Summary	13690
	Salaries and Wages Expense		9460
	Maintenance and Repairs Expense		2930
	Income Tax Expense		1300
	(To dose expense accounts)
July 31	Income Summary	5350		=19040-13690
	Retained earnings		5350
	(To close net income/(loss) to retained earnings)
July 31	Retained earnings	1760
	Dividends		1760
	(To close dividends to retained earnings)
	Ending balance in Retained Earnings	28400		=24810+5350-1760