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			77,000			May 31	G2			38,500
M. Muncel, Withdrawals			Acct. No. 302				Insurance Expense			Acct. No. 637
Date	PR	Debit	Credit	Balance			Date	PR	Debit	Credit	Balance
May 31	G2			47,000			May 31	G2			4,420
Services Revenue			Acct. No. 401				Rent Expense			Acct. No. 640
Date	PR	Debit	Credit	Balance			Date	PR	Debit	Credit	Balance
May 31	G2			135,674			May 31	G2			9,440
Depreciation Expense			Acct. No. 603				Income Summary			Acct. No. 901
Date	PR	Debit	Credit	Balance			Date	PR	Debit	Credit	Balance
May 31	G2			17,000

1. Prepare closing journal entries from the above ledger accounts.
2. Post the entries from Requirement 1 to the General Ledger accounts below. Use the transaction number from Requirement 1 as the date.

Answer 1

1. Closing journal entries:

Date	Account Title and Explanation	Debit	Credit
5/31	Service Revenue	135674
	Income Summary		135674
5/31	Income Summary	17000
	Depreciation Expense		17000
5/31	Income Summary	38500
	Salaries Expense		38500
5/31	Income Summary	4420
	Insurance Expense		4420
5/31	Income Summary	9440
	Rent Expense		9440
5/31	Income Summary	66314
	Retained Earnings		66314

2.General Ledger accounts:

Service Revenue
5/31 Income summary		5/31 Bal.	135674
Depreciation Expense
5/31 Bal.	17000	5/31 Income summary	17000
Salaries Expense
5/31 Bal.	38500	5/31 Income summary	38500
Insurance Expense
5/31 Bal.	4420	5/31 Income summary	4420
Rent Expense
5/31 Bal.	9440	5/31 Income summary	9440
Income summary
5/31 Depreciation Expense	17000	5/31 Service revenue	135674
5/31 Salaries Expense	38500
5/31 Insurance Expense	4420
5/31 Rent Expense	9440	5/31 Retained Earnings	66314

As per the format stated in the given question posting closing entries into ledger as follows,

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			77,000		May-31	G2			38,500
									38500	0
M. Muncel, Withdrawals			Acct. No. 302
Date	PR	Debit	Credit	Balance		Insurance Expense			Acct. No. 637
May-31	G2			47,000		Date	PR	Debit	Credit	Balance
						May-31	G2			4,420
Services Revenue			Acct. No. 401			May-31			4420	0
Date	PR	Debit	Credit	Balance
May-31	G2			1,35,674		Rent Expense			Acct. No. 640
May-31		135674		0		Date	PR	Debit	Credit	Balance
						May-31	G2			9,440
Depreciation Expense			Acct. No. 603			May-31			9440	0
Date	PR	Debit	Credit	Balance
May-31	G2			17,000		Income Summary			Acct. No. 901
May-31			17000	0		Date	PR	Debit	Credit	Balance
						May-31		69360	135674	66314