Question

Current Attempt in Progress Sheffield Corporation reports the following adjusted account balances, shown in alphabetical order, at the end of its fiscal year, February 28, 2021 $ Accounts payable Accounts receivable Accumulated depreciation-equipment Cash Common shares Depreciation expense Dividends declared Equipment Fees earned 12,900 28,600 5,500 18,600 20,300 4,500 2.100 23,000 89,700 4.800 Income tax payable Insurance expense Prepaid insurance Rent expense Retained earnings Salaries expense Salaries payable Supplies Supplies expense Utilities expense 4,700 3,400 2,900 6,200 20,900 46,300 2.800 1,000 4,100 2.300 Income tax expense

and some explanation on why would be amazing thank you:)

Answer 1

Date	Account Titles & Explanation	Debit	Credit
Feb 28	Fees Earned	89,700
	Income Summary		89,700
	(To close revenue account)
Feb 28	Income Summary	71,600
	Salaries Expense		46,300
	Rent Expense		6,200
	Depreciation Expense		4,500
	Supplies Expense		4,100
	Insurance Expense		3,400
	Utilities Expense		2,300
	Income Tax Expense		4,800
	(To close expense accounts)
Feb 28	Income Summary [89,700 - 71,600]	18,100
	Retained Earnings		18,100
	(To close net income / loss)
Feb 28	Retained Earnings
	Dividends Declare	2,100
	(To close dividends)		2,100

Explanation for understanding.

• Revenue accounts have a credit balance. Thus to transfer fees earned to income statement  Fees Earned A/ c is debited & Income Summary A/c is credited.
• Expense accounts have a debit balance. Thus to transfer expenses to income statement  Income Summary A/ c is debited & all expense A/c is credited.
• Excess of revenue over expenses is called net income. Thus to transfer net income of $18,100 to retained earnings, Income Summary A/ c is debited & Retained Earnings A/c is credited.
• Dividends results in reductions in retained earnings balance. Thus Retained Earnings A/c is debited & Dividends Declare A/c is credited.