Question

The income statement for the Splish Brothers Inc for the month ended July 31 shows Service Revenue $18.250, Salaries and Wages Expense $9.220. Maintenance and Repairs Expense $3,560, and Income Tax Expense $1.500. The statement of retained earnings shows an opening balance for Retained Earnings of $20,820 and Dividends $1,800 (a) Prepare dosing journal entries. (If no entry is required, select "No Entry for the account titles and enter for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manualy) Date Account Titles and Explanation Debit July Credit 31 (To dose revenue account) July 31 (To dose expense accounts) July 31 (Todose net income/loss) to retained earnings) July 31 Todose dividends to retained camins

Answer 1

a):- Preparing closing entries

Date	Accounts and explanation	Debit $	Credit $
July 31	Income summary	18250
	Service revenue		18250
	To close revenue account
July 31	Salaries and wages expenses	9220
	Maintenance and repairs expenses	3560
	Income tax expenses	1500
	Income summary		14280
	To close expenses account
July 31	Income summary	3970
	Retained earning		3970
	To net income transfer to retained earning)
July 31	Retained earning	1800
	Dividend		1800
	To close dividend to Retained earning

Solution B:-

Accounting cycle	Proper sequences
a)Prepare a post closing trial balance	9
b)prepare a adjusted trial balance	6
c)Analyze business transaction	1
d)Prepare trial balance	4
e)Journalize the transactions	2
f)Journalize and post closing entries	8
g)Prepare financial statements	7
h)journalize and post adjusting entry	5
I)Post to ledger	3

Solution 3

No.	Account titles and explanation	Debit $	Credit $
1	Account receivables	740
	Service revenue		740
2	Utility expenses	450
	Utility payables		450
3	Depreciation	350
	Accumulated Depreciation-Equipment		350
	To record depreciation expenses
	Interest expense	450
	Interest Payables		450
	To record interest expenses
4	Insurance expenses($24000/12)	2000
	Prepaid insurance		2000
5	Supplies expenses	1260
	Supplies($1760-$500)		1260

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