Question

CES Brief Exercise 4-5 The ledger of Rios Company contains the following balances: Retained Earnings $31,818; Dividends $2,431; Servic Revenue $48,557; Salaries and Wages Expense $28,792; and Supplies Expense $7,536. The closing entries are as follows: (1) Close revenue accounts. (2) Close expense accounts. (3) Close net income/(loss). (4) Close dividends. Post the closing entries in the order presented in the problem and use the numbers as a reference. tudy Salaries and Wages Expense Supplies Expense Service Revenue Dividends Income Summary Retained Earnings

Answer 1

Ans.	First of all all revenues and expenses are closed to income summary account.
	Then the net income is closed by debiting retained earnings to income summary
	account and finally dividends are closed to retaiend earnings account.
No.	Account Titles and Explanations	Debit	Credit
1	Service revenue	$48,557
	Income summary		$48,557
	(To close revenue accounts)
2	Income summary	$36,328
	Salaries and wages expenses		$28,792
	Supplies expenses		$7,536
	(To close expenses accounts)
3	Income summary ($48,557 - $36,328)	$12,229
	Retained earnings		$12,229
	(To close net income)
4	Retained earnings	$2,431
	Dividends		$2,431
	(To close the dividends account)
	Salaries and wages expenses
	Balance	$28,792	Income summary	$28,792
	Supplies expenses
	Balance	$7,536	Income summary	$7,536
	Service revenue
	Income summary	$48,557	Balance	$48,557
	Dividends
	Balance	$2,431	Retained earnings	$2,431
	Income summary
	Salaries and wages expenses	$28,792	Service revenue	$48,557
	Supplies expenses	$7,536
	Retained earnings (balance)	$12,229
	Total	$48,557	Total	$48,557
	Retained earnings
	Dividends	$2,431	Income summary	$12,229
	Balance	$9,798
	Total	$12,229	Total	$12,229