Question

The partial worksheet for the Jamison Company showed the following data on October 31, 2019. INCOME STATEMENT BALANCE SHEET ACCOUNT NAME DEBIT CREDIT DEBIT CREDIT

Jason Jamison, Capital 36,500

Jason Jamison, Drawing 4,750

Fees Income 26,500

Salaries Expense 13,000

Rent Expense 1,650

Supplies Expense 1,050

Utilities Expense 1,150

Depr. Exp. −Equip. 1,500

Totals 18,350 26,500 48,150 40,000

Net Income 8,150 8,150

26,500 26,500 48,150 48,150

Prepare the closing entries for Jamison Company on October 31, 2019. (4 sheets,,,see below)

*Income to income summary, expenses to income summary, transfer net income or net loss from income summary to capital, transfer drawings to capital account*

Answer 1

Closing entries are the entries passed for closing the temporary accounts (Revenue and Expenses Accounts) at the end of the accounting period. They are done after the financial statement for the accounting year has been prepared. This is done make the temporary accounts zero so that these temporary accounts begins with zero balance in the next accounting period. Closing credit/debit entry is passed in all temporary accounts having debit balance/credit balance before passing the closing entry. The credit /debit amount entered is equal the debit/credit balance prior passing the closing entry. The net amount of closing entries is the Net Income /(Loss) for the period which is ultimately transferred retained earnings. Date Account Title Debit Credit Oct 31, 2019 Fees Income $26,500 Income Summary $26,500 (To close the revenue account) Oct 31, 2019 Income Summary $18,350 Salaries Expense $13,000 Rent Expense $1,650 Supplies Expense $1,050 Utilities Expense $1,150 Depr. Exp. -Equip. $1,500 (To close the expense account) Oct 31, 2019 Income Summary $8,150 Jason Jamison, Capital $8,150 (To transfer the net income to capital account) Oct 31, 2019 Jason Jamison, Capital $4,750 Jason Jamison, Drawing $4,750 (To close the drawings account)