Question

Using the Cross Corporation data from the previous problem, prepare the company's closing entries. 1. Prepare the journal entry required to close the revenue account 2. Prepare the journal entry required to close the expense accounts. (Remember that you must show each expense account and balance in order to close it.) 3. Prepare the Journal entry required to close the dividend account. 4. Post all closing entries to the Retained Earnings T-account below. Prove that the balance in Retained Earnings after closing all closing entries equals the balance shown on the Balance Sheet. (Beginning balance is shown on the Adjusted Trial Balance.) Retained Earnings Page 34

Answer 1

Type of account financial statement Account title Debit Credit 16,200 25,300 78,000 2,000 15,000 20,100 30,000 EXP Accounts payable Accounts receivable Accumulated depreciation, Machinery Allowance for doubtul accounts Bonds payable Cash Common stock Dividends Insurance expense Machinery Notes receivable Other operating expenses Paid-in capital in excess of par Prepaid insurance Rent expense Retained earnings Sevice fees earned Supplies Unearned revenue Utilities expense Wages expense Totals 21,000 4,400 245,500 8,000 20,700 EXP EQ 76,800 3,800 37,000 EXP 44,600 295,200 6,700 4,600 EXP EXP 7,200 162,700 562,400 562,400

Credit Date Dec. 31 Account title Sevice fees earned Retained earnings Debit 295,200 295,200 Credit Debit 232,000 Date Account title Dec. 31 Retained earnings Insurance expense Other operating expenses Rent expense Utilities expense Wages expense 4,400 20,700 37,000 7,200 162,700 Credit Date Account title Dec. 31 Retained earnings Dividends Debit 21,000 21,000

44,600 295,200 Retained earnings Insurance expense 4,400 Beg. Bal. Other operating expenses 20,700 Sevice fees earned Rent expense 37,000 Utilities expense 7,200 Wages expense 162,700 Dividends 21,000 End. Bal. 86,800