Question

SE3-9.stat eBook Print Quo 8 Natcomplete Marked out of 200 question Prepare Closing Entries to retained Earnings The Decade Company's adjusted trial balance contains the following balances as of December 31: Retained Earrings $8.500; Dividends $2,000; Sales 522,000, Cost of Goods Sold 58.000Selling and Administrative Expenses $3.000, Interest Expense $1.500 Prepare the closing entries for The Decade Company. Close the temporary accounts straight to retained earnings. The balance of $8,500 in the retained earnings account is from the beginning of the year. What is the ending retained earnings balance after posting the closing entries?

Answer 1

a.

Description	Debit	Credit
Sales A/c	$        22,000
Retained earnings A/c		$        22,000
(To record revenue accounts closure)
Retained earningsA/c	$        12,500
Cost of goods sold(COGS) A/c		$          8,000
Selling and administrative(S&A) A/c		$          3,000
Expense on Interest A/c		$          1,500
(To record expense account closure)
Retained earnings A/c	$          2,000
Dividends A/c		$          2,000
(To record dividend account closure)

b.

Retained earnings closing balance = $16,000

	Particulars	Amount
a	Opening balance	$          8,500
b	Revenue from sales	$        22,000
c	Expenses	$        12,500	(8000+1500+3000)
d	Dividend(Cash)	$          2,000
e=a+b-c-d	Closing balance	$        16,000