Question

On December 31, 2019, the Income Statement section of the worksheet for Capeletti Distributors contained the following information. Income Statement Section Debit Credit Income Summary $ 39,300 $ 42,600 Sales 258,000 Sales Returns and Allowances 4,250 Sales Discounts 3,250 Interest Income 205 Purchases 135,100 Freight In 2,550 Purchases Returns and Allowances 2,350 Purchases Discounts 1,600 Rent Expense 8,850 Utilities Expense 3,000 Telephone Expense 1,610 Salaries Expense 66,800 Payroll Taxes Expense 5,340 Supplies Expense 1,770 Depreciation Expense 2,850 Interest Expense 410 Totals $ 275,080 $ 304,755 Assume further that the owner of the firm is John Capeletti and that the John Capeletti, Drawing account had a balance of $26,550 on December 31, 2019. Prepare the entries that should be made in the general journal to close the revenue, cost of goods sold, expense, and other temporary accounts.

Answer 1

Ans:

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Date	Accounst Title	Dr	Cr
31-Dec	Sales	$ 258,000
	Interest Income	$ 205
	Purchase Return & allowances	$ 2,350
	Purchase Discount	$ 1,600
	Income summary		$ 262,155
	(being revenue and credit items closed)
31-Dec	Income summary	235780
	Purchases		135100
	Freight in		2550
	Rent expenses		8850
	Utilities expenses		3000
	Telephone Expenses		1610
	Salaries expenses		66800
	Payroll taxes expenses		5340
	Supplies expenses		1770
	Depreciation expenses		2850
	Interest expenses		410
	Sales Return & allowances		4250
	Sales discount		3250
31-Dec	Income summary (262155-235780)	$ 26,375
	John Capeletti Capital		$ 26,375
31-Dec	John Capeletti Capital	26550
	John Capeletti Drawing		26550
	If in case Cost of good sold account taken)
31-Dec	Sales	$ 258,000
	Interest Income	$ 205
	Income summary		$ 258,205
	(being revenue and credit items closed)
31-Dec	Income summary	231830
	Cost of good sold		133700
	Rent expenses		8850
	Utilities expenses		3000
	Telephone Expenses		1610
	Salaries expenses		66800
	Payroll taxes expenses		5340
	Suppies expenses		1770
	Depreciation expensews		2850
	Interest expenses		410
	Sales Return & allowances		4250
	Sales dicount		3250
	working
	cost of goods sold=Purchases+Frieght in -Purchases and returns allowances-purchases discount	133700
	135100+2550-2350-1600=133700
31-Dec	Income summary (258205-231830)	$ 26,375
	John Capeletti Capital		$ 26,375
31-Dec	John Capeletti Capital	26550
	John Capeletti Drawing		26550