Question

Rainbow Services Co. offers its services to individuals desiring to improve their personal images. After the accounts have been adjusted at August 31, the end of the fiscal year, the following balances were taken from the ledger of Rainbow Services Co. Retained Earnings $630,000 Dividends 39,000 Fees Earned 284,000 Wages Expense 248,900 Rent Expense 59,200 Supplies Expense 14,500 Miscellaneous Expense 6,900 Journalize the four entries required to close the accounts. If an amount box does not require an entry, leave it blank. Aug. 31 Close revenues Aug. 31 Close expenses Aug. 31 Close net income/net loss Aug. 31 Close dividends

Answer 1

	Accounts Title and Explanation	Debit	Credit
Aug-31	Fees Earned	284,000
	Income Summary		284,000
	(To record closing of credit balance account)
Aug-31	Income Summary	329,500
	Wage Expense		248,900
	Rent Expense		59,200
	Supplies exp		14,500
	Misc. Expense		6,900
	(To record closing of debit balance account)
Aug-31	Retained Earning	45,500
	Income Summary		45,500
	(To close income summary account)
Aug-31	Retained Earning	39,000
	Dividends		39,000
	(To close dividend account)