Question

Closing Entries

On July 31, the close of the fiscal year, the balances of the accounts appearing in the ledger of Serbian Interiors Company, a furniture wholesaler, are as follows:

Accumulated Depreciation—Building	$365,000		Inventory	$115,000
Administrative Expenses	440,000		Notes Payable	100,000
Building	810,000		Retained Earnings	455,000
Cash	78,000		Sales	1,437,000
Common Stock	75,000		Sales Tax Payable	4,500
Cost of Goods Sold	775,000		Selling Expenses	160,000
Dividends	15,000		Store Supplies	16,000
Interest Expense	6,000		Store Supplies Expense	21,500

Prepare the July 31, 2018, closing entries for Serbian Interiors Company in the order as presented in the chapter.

Answer 1

July 31	Sales	1437000
	Income Summary		1437000
July 31	Income Summary	1402500
	Administrative Expenses		440000
	Cost of Goods Sold		775000
	Interest Expense		6000
	Selling Expenses		160000
	Store Supplies Expense		21500
July 31	Income Summary	34500		=1437000-1402500
	Retained Earnings		34500
July 31	Retained Earnings	15000
	Dividends		15000