Question

Record the entry to close out the revenue accounts. (Record debits first, then credits. Exclude explanations from 0 Data Table - 14,100 14,100 41,500 31,900 4,600 Cost of services sold .........$ Accumulated depreciation Selling, general, and administrative expenses Retained earnings, December 31, 2017 Service revenue........$ Service revenue.. Depreciation expense ... Other revenue .. Dividends declared Income tax expense Income tax payable .. 400 6,300 900 1.000 2,200 900 Print Done 6,300 1,000 then click Check Answer.

Answer 1

Ans. 1	First of all all revenues and expenses are closed to income summary account.
	Then the net income is closed to retained earnings account and finally
	dividends are closed to retained earnings account.
	We can use retained earnings account rather than income summary.
Date	Accounts	Debit	Credit
31-Dec	Service revenue	$31,900
	Other revenue	$400
	Income summary		$32,300
	(To close revenue accounts)
31-Dec	Income summary	$26,000
	Cost of services sold		$14,100
	Depreciation expense		$4,600
	Selling, general and administrative expenses		$6,300
	Income tax expense		$1,000
	(To close expenses accounts)
31-Dec	Income summary	$6,300
	Retained earnings		$6,300
	(To close net income)
31-Dec	Retained earnings	$900
	Dividends		$900
	(To close the dividends account)
Ans. 2	*Calculations of Net income :
	Particulars	Amount	Amount
	Service revenue	$31,900
	Other revenue	$400
	Total revenue (a)		$32,300
	Less: Expenses:
	Cost of services sold	$14,100
	Depreciation expense	$4,600
	Selling, general and administrative expenses	$6,300
	Income tax expense	$1,000
	Total expenses (b)		$26,000
	Net Income (a - b)		$6,300
Ans . 3	T Account of Retained Earnings is as follows:
	Retained Earnings Account
	Particulars	Amount	Particulars	Amount
	Dividends declared	$900	Beginning balance	$2,200
	Ending balance (balancing figure)	$7,600	Net income	$6,300
		$8,500		$8,500
	*Net Income is added and dividends are subtracted from beginning balance of retained earnings to
	calculate the ending balance of retained earnings.