Background: Only revenue, expense, and dividend accounts are closed—not asset, liability, Common Stock, or Retained Earnings accounts. The four basic steps in the closing process are:
1. Transactions and events in 2018 Journal entries:
a. | Cash Dr | $13 |
Note Payable (short-term) Cr | $13 | |
b. | Land Dr | $7 |
Cash Cr | $7 | |
c. | Cash Dr | $25 |
Common Stock Cr | $25 | |
d. | Software Dr | $12 |
Cash Cr | $12 | |
e. | Supplies Dr | $17 |
Accounts payable Cr | $17 | |
f. | Accounts Payable Dr | $14 |
Cash Cr | $14 | |
g. | Merely signing a contract does not by itself require a journal entry. | |
h. | Cash Dr | $119 |
Accounts Receivable Dr | $39 | |
Service Revenue Cr | $158 | |
i. | Salaries and wages expense Dr | $84 |
Cash Cr | $84 | |
j. | Cash Dr | $23 |
Accounts Receivable Cr | $23 | |
k. | Amortization expense Dr | $6 |
Accumulated amortization Cr | $6 | |
l. | Supplies expense Dr | $6 |
Supplies Cr | $6 | |
m. | Depreciation expense Dr | $7 |
Accumulated Depreciation Cr | $7 | |
n. | Interest expenses Dr | $2 |
Interest payable Cr | $2 | |
o. | Salaries and wages expense Dr | $12 |
Salaries and Wages payable Cr | $12 | |
p. | Income tax expense Dr | $9 |
Income Tax payable Cr | $9 |
2. Identify all the temporary account (Nominal account) along with the nature of account balance:
Revenue Cr, Salaries and wages expense Dr, Amortization expense Dr, Supplies expense Dr, Depreciation expense Dr, Interest expenses Dr, Income tax expense Dr.
3. Closing entries:
1 | Service Revenue Dr | $158 |
Income Summary Cr | $158 | |
2 | Income Summary Dr | $126 |
Salaries and wages expense Cr | $96 | |
Amortization expense Cr | $6 | |
Supplies expense Cr | $6 | |
Depreciation expense Cr | $7 | |
Interest expenses Cr | $2 | |
Income tax expense Cr | $9 | |
3 | Income Summary Dr | $32 |
Retained Earnings Cr | $32 |
4. Post Trial balance after closing entries:
Account title | Debit | Credit | (All in $) |
Cash | $67 | ||
Accounts receivable | 20 | ||
Supplies | 22 | ||
Land | 7 | ||
Euipment | 52 | ||
Accumulated Depreciation | 7 | ||
Software | 20 | ||
Accumulated amortization | 6 | ||
Accounts payable | 9 | ||
Note Payable (short-term) | $13 | ||
Salaries and Wages pyable | 12 | ||
Interest payable | 2 | ||
Income Tax payable | 9 | ||
Common Stock | 91 | ||
Retained Earnings | 39 | ||
Service Revenue | 0 | ||
Salaries and wages expense | 0 | ||
Depreciation expense | 0 | ||
Amortization expense | 0 | ||
Income tax expense | 0 | ||
Interest expenses | 0 | ||
Supplies expense | 0 | ||
Total | 188 | 188 | 0 |
Required information The following information applies to the questions displayed below) Brothers Harry and Herman Hausyerday...
Required information [The following information applies to the questions displayed below.] Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify): Account Titles Debit Credit Cash $ 2 Accounts Receivable 6 Supplies 13 Land 0 Equipment 57 Accumulated Depreciation $ 5 Software 18 Accumulated Amortization...
Required information [The following information applies to the questions displayed below Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify): Account Titles Cash Debit Credit $ 4 Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short-term) Salaries and...
Required information [The following information applies to the questions displayed below.) Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify): Credit Debit $ 3 5 12 60 $G 15 5 5 Account Titles Cash Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortization...
Required information [The following information applies to the questions displayed below.] Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify): Account Titles Debit Credit Cash $ 4 Accounts Receivable 4 Supplies 11 Land 0 Equipment 56 Accumulated Depreciation $ 7 Software 17 Accumulated Amortization...
Required information The following informetion applies to the questions displayed below Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify: Debit Credit Account Titles $ 3 Cash Accounts Receivable Supplies Land 12 Equipmont Accumulated Depreciation Software 63 6 18 Accumulated Amortization Accounts Payable Notes...
Required information [The following information applies to the questions displayed below.] Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify): Account Titles Debit Credit Cash $ 4 Accounts Receivable 4 Supplies 11 Land 0 Equipment 59 Accumulated Depreciation $ 7 Software 14 Accumulated Amortization...
Required Information (The following information applies to the questions displayed below] Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows the amounts are rounded to thousands of dollars to simplify): decount Titles ge nerated amortization ESS- Account Titles Cash Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short-term)...
[The following information applies to the questions displayed below) Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc) on January 1, 2013. The annual reporting period ends December 31. The trial balance on January 1, 2015, follows (the amounts are rounded to thousands of dollars to simplify: Credit Debit $ 3 Account Titles Cash Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short-term) Salaries and Wages Payable...
Required information [The following information applies to the questions displayed below.] Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify): Account Titles Debit Credit Cash $ 4 Accounts Receivable 4 Supplies 11 Land 0 Equipment 56 Accumulated Depreciation $ 7 Software 17 Accumulated Amortization...
Required information [The following information applies to the questions displayed below.] Brothers Harry and Herman Hausyerday began operations of their machine shop (H & H Tool, Inc.) on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2018, follows (the amounts are rounded to thousands of dollars to simplify): Account Titles Debit Credit Cash $ 4 Accounts Receivable 4 Supplies 11 Land 0 Equipment 59 Accumulated Depreciation $ 7 Software 14 Accumulated Amortization...