Question

Section B: Short Exercises (10 Marks) B1 - At December 31, 2019, account balances after adjustments for Smith Company are as follows: (AR1: 5 marks) Accounts Cash Supplies Equipment Accumulated Depreciation Equipment Notes Payable Accounts Payable Smith's, Capital Smith's, Drawings Service Revenue Advertising Expense Depreciation Expense Rent Expense Salaries Expense Utilities Expense Account Balances $ 10,500 1,500 18.750 4,500 6,375 1.875 7,500 3,000 42,750 7,050 1,500 9,750 9,000 1,950 Required: Prepare the closing entries for Smith Company at December 31, 2019.

Answer 1

Closing Entries:

Date	Account Name	Debit	Credit
Dec 31	Service Revenue	$ 42,750
	To Income Summary		$ 42,750
	( To close revenue account)
Dec 31	Income Summary	$29,250
	To Advertising Expense		$7050
	To Depreciation Expense		$1500
	To Rent Expense		$9750
	To Salaries Expense		$9000
	To Utilities Expense		$1950
	(To close expense account)
Dec 31	Income Summary ( $42,750 - $29,250)	$13,500
	To Smith's Capital		$13,500
	( To close income summary account)
Dec.31	Smith's Capital	$3000
	To Smith's Drawing		$3000
	( To close withdrawl account)