Question

Danos Company's partial worksheet tor the month ended December 31. 2019, is shown below Open the owners capital account (account number 30T in the general ledger end record the December 1, 2019 balanice of S77000 shown on the worksheet. STATEMENT BALANCE SHEET DEBLT CREOIT DEBIT CREDIT ACCOUNT NANE 24,6 18,308 66,588 Supplies Equipment Accm. Depr quip Accounts Payatle D, Denos,Capital D. Danos, DrawEng 7.388 53,888 Salari 2 Rent Expens Supplies Expenss Degr Exp -Equis. 22,400 4,100 2,050 43,300 53,808 132,200 119,d 53, s00 53,888 132,2e 132.28 Prepare the closing entries for the Danos Company's on D Prepare a postclosing triai balance mber 81 2019 os he closang ensr ries to the owner's capital account

Answer 1

Closing entries are those entries recorded at the last day of reporting period to close revenue and expense accounts to retained earnings through a temperary account called income summary When closing entries are recorded for revenues, Income Summary account shall be credited and Revenue accounts shall be debited; Similarly, when closing entries are recorded for expenses Income Summary account shall be debited and Expense accounts shall be credited Finally, balance in Income Summary account will represent either Net income or Net loss for the reporting period which shall be closed to Owner's Capital Account. Event 1) DEBIT Date ACCOUNT TITLES CREDIT $53,800 Dec. 31 Fees Income $53,800 Income Summa $41,500 2) Dec. 31 Income Summary $29,400 $4,100 $2,050 $5,950 Salaries expenses Rent expenses Supplies expense Depreciation expense $12,300 [$53,800 $41,500; Net income is closed to Capital Account] 3) Dec. 31 Income Summary D.Danos, Capital $12,300 $7,300 4) Dec. 31 р.Danos, capital $7,300 [Withdrawal is closed to Capital Account] D.Danos, Drawings

D.Danos, Capital $7,300 Beg. Bal $77,000 $12,300 $82,000 [$77,000 $12,300 $7,300] Closing-4 Closing-3 End. Bal Danos Company Post-Closing Trial Balance December 31 DEBIT $23,500 $24,600 $10,300 $66,500 ACCOUNT TITLES Cash Accounts Receivable Supplies Equipment Accum. Dep. - Equip Accounts Payable D.Danos, Capital TOTALS CREDIT $22,600 $20,300 $82,000 [Ref: T-Account prepared above] $124,900$124,900