Question

Use the May 31 fiscal year-end information from the following ledger accounts (assume that all accounts have normal balances).

General Ledger
M. Muncel, Capital			Acct. No. 301				Salaries Expense			Acct. No. 622
Date	PR	Debit	Credit	Balance			Date	PR	Debit	Credit	Balance
May 31	G2			40,000			May 31	G2			20,000
M. Muncel, Withdrawals			Acct. No. 302				Insurance Expense			Acct. No. 637
Date	PR	Debit	Credit	Balance			Date	PR	Debit	Credit	Balance
May 31	G2			22,000			May 31	G2			4,400
Services Revenue			Acct. No. 401				Rent Expense			Acct. No. 640
Date	PR	Debit	Credit	Balance			Date	PR	Debit	Credit	Balance
May 31	G2			76,000			May 31	G2			8,400
Depreciation Expense			Acct. No. 603				Income Summary			Acct. No. 901
Date	PR	Debit	Credit	Balance			Date	PR	Debit	Credit	Balance
May 31	G2			15,000

  
1. Prepare closing journal entries from the above ledger accounts.

-Record the entry to close revenue accounts.

-Record the entry to close expense accounts.

-Record the entry to close income summary account.

-Record the entry to close the withdrawals account.

2. Post the entries from Requirement 1 to the General Ledger accounts below. Use the transaction number from Requirement 1 as the date.

Post the entries from Requirement 1 to the General Ledger accounts below. Use the transaction number from Requirement 1 as the date.

301: M. Muncel, Capital 622: Salaries Expense Date Debit Credit Balance Date Debit Credit Balance May 31 40,000 May 31 20,000 302: M. Muncel, Withdrawals 637: Insurance Expense Date Debit Credit Balance Date Debit Credit Balance May 31 22,000 May 31 4,400 401: Services Revenue 640: Rent Expense Date Debit Credit Balance Date Debit Credit Balance May 31 76,000 May 31 8,400 603: Depreciation Expense 901: Income Summary Date Debit Credit Balance Date Debit Credit Balance May 31 15,000

  

Answer 1

Answer -

1. Answer -

Event	General Journal	Debit	Credit
1.	Services revenue	$76000
	Income summary		$76000
2.	Income summary	$47800
	Depreciation expense		$15000
	Salaries expense		$20000
	Insurance expense		$4400
	Rent expense		$8400
3.	Income summary	$28200
	M. Muncel, capital		$28200
4.	M. Muncel, capital	$22000
	M. Muncel, withdrawals		$22000

Calculation:

Event 2:

Total expenses = Depreciation expense + Salaries expense + Insurance expense + Rent expense

= $15000 + $20000 + $4400 + $8400

= $47800

Event 3:

Net income = Services revenue - Total expenses

= $76000 - $47800

= $28200

2. Answer -

301: M. Muncel, capital
Date	Debit	Credit	Balance
May 31			$40000
3.		$28200	$68200
4.	$22000		$46200

M. Muncel, capital:

Ending balance = Beginning balance + Net income - Withdrawals

= $40000 + $28200 - $22000

= $46200

302: M. Muncel, withdrawals
Date	Debit	Credit	Balance
May 31			$22000
4.		$22000	$0

401: Services revenue
Date	Debit	Credit	Balance
May 31			$76000
1.	$76000		$0

603: Depreciation expense
Date	Debit	Credit	Balance
May 31			$15000
2.		$15000	$0

622: Salaries expense
Date	Debit	Credit	Balance
May 31			$20000
2.		$20000	$0

637: Insurance expense
Date	Debit	Credit	Balance
May 31			$4400
2.		$4400	$0

640: Rent expense
Date	Debit	Credit	Balance
May 31			$8400
2.		$8400	$0

901: Income summary
Date	Debit	Credit	Balance
1.		$76000	$76000
2.	$47800		$28200
3.	$28200		$0

Income summary:

Ending balance = Services revenue - Total expenses - Net income

= $76000 - $47600 - $28200

= $0