Question

signment CALCULATOR FULL SCREEN PRINTER VERSION NEXT Brief Exercise 4-5 Your answer is partially correct. Try again. The ledger of Rios Company contains the following balances: Retained Earnings $31,818; Dividends $2,431; Service Revenue $48,557; Salaries and Wages Expense $28,792; and Supplies Expense $7,536. The closing entries are as follows: (1) Close revenue accounts. (2) Close expense accounts. (3) Close net income/(loss). (4) Close dividends. Post the closing entries in the order presented in the problem and use the numbers as a reference. Salaries and Wages Expense Bal. 28792 Bal. 2879 Supplies Expense Service Revenue 48557 Dividends 4231 cm 2431 Income Summary 48557 7536 7536 2431 2431 Retained Earnings 2431 2431 9798 9798 12229 LINK TO TEXT u d SAVE FOR LATER SUBMIT ANSWE

Answer 1

Summary of various A/c balances for the books closure purpose:
	$
Retained earning A/c	31,818
Dividend A/c	2,431
Revenue from services A/c	48,557
Salary and wages A/c	28,792
Supplies A/c	7,536
Since the steps for closing the books of account are already mentioned in the question, we will follow the same.
However, as per the generally accepted accounting practises, a simialr closing process is followed for the closure of books of account of any enterprise.
Accordingly, following will be the scheme of entries to be passed in the books:
Entry no. 1 - Closing of Revenue a/c
		Dr	Cr
Revenue from Services A/c	Dr	48,557
Profit and Loss A/c	Cr		48,557
(Being Revenue from services transferred to Statement of Income/Profit and Loss)
Entry no. 2 - Closing of Expense a/c
Profit and Loss A/c	Dr	36,328
Salary and Wages A/c	Cr		28,792
Supplies A/c	Cr		7,536
(Being expenses transferred to Statement of Income/Profit and Loss)
Entry no. 3 - Surplus in the Profit and Loss (Profit for the year) transferred to Retained Earning A/c
Profit and Loss A/c	Dr	12,229
Retained earnings A/c	Cr		12,229
(Being profit transferred to Retained earning A/c)
Note: Now the revised balance of retained earnings A/c becomes $ 44,047 and dividend is paid to the owners of the company/shareholders.
The same is paid out of the retained earnings and hence will debited to retained earnings since it an appropriate of profits.
Entry no. 4 - Closure of Dividend paid A/c
Retained earnings A/c	Dr	2,431
Dividend A/c	Cr		2,431
Now all the closure entries have been passed in the books and revised closing balance of the retained earnings shall be $ 41,616 which can be computed as follows:
Particulars	$
Opening balance of retained earnings	31,818
Add: Profit for the year	12,229
Less: Dividends paid	-2,431
Closing balance of retained earnings	41,616