Question

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances:

On January 1, 2021, the general ledger of 3D Family Fireworks includes the following account balances: Credit Debit $ 25,500 14,400 Accounts Cash Accounts Receivable Allowance for Uncollectible Accounts 2,400 Supplies Notes Receivable (6%, due in 2 years) 3,300 28,000 77,800 Land Accounts Payable Common Stock 9,400 104,000 33,200 Retained Earnings $149,000 $149,000 Totals During January 2021, the following transactions occur: 2 Provide services to customers for cash, $43,100 6 Provide services to customers on account, $80,400. January 15 Write off accounts receivable as uncollectible, 2,000. January January January 20 Pay cash for salaries, $32,200. January 22 Receive cash on accounts receivable, $78,000 January 25 Pay cash on accounts payable, $6,300. January 30 Pay cash for utilities during January, $14,500. .... The following information is available on January 31, 2021.

Question: Record the closing entry for expenses.

Answer 1

Answer :

To close expense account following entry is passed -

	Debit	Credit
Income Summary	$          89,450
Bad debt expense		$ 5,800
Salary expense		$ 66,500
Utilities expense		$ 14,500
Supplies expense		$ 2,650

Working Notes:

1. Posting transactions and adjustments

ASSETS

=

LIABILITIES

+

RETAINED EARNINGS

Cash

Accounts receivable

Interest receivable

Supplies

=

Accounts payable

Allowance for uncollectibles

Salary payable

+

Revenue

Interest revenue

Salary expense

Utilities expense

Bad debt expense

Supplies Expense

2-Jan

43,100

=

+

43,100

6-Jan

80,400

=

+

80,400

15-Jan

(2,000)

=

(2,000)

+

20-Jan

(32,200)

=

+

(32,200)

22-Jan

78,000

(78,000)

=

+

25-Jan

(6,300)

=

(6,300)

+

30-Jan

(14,500)

=

+

(14,500)

adj - a

=

5,800

+

(5,800)

adj - a

(1,160)

=

(1,160)

+

adj - a

(450)

=

(450)

+

adj - b

(2,650)

=

+

(2,650)

adj-c

140

=

+

140

adj-d

=

34,300

+

(34,300)

68,100

(1,210)

140

(2,650)

=

(6,300)

2,190

34,300

+

123,500

140

(66,500)

(14,500)

(5,800)

(2,650)

Totals

$ 64,380

=

$ 64,380

Adjusted Trial balance as on 31st January

Accounts	Unadjusted trial balance		Adjustments to be made	Adjusted trial balance
	Debit $	Credit $		Debit $	Credit $
Cash	25,500		68,100	93,600
Accounts Receivables	14,400		(1,210)	13,190
Allowance for uncollectible accounts		2,400	2,190		4,590
Notes receivable	28,000		-	28,000
Interest receivable			140	140
Supplies	3,300		(2,650)	650
Land	77800		-	77,800
Accounts payable		9,400	(6,300)		3,100
Salary payable			34,300		34,300
Common stock		104,000	-		104,000
Retained earnings		33,200	-		33,200
Revenue			123,500		123,500
Interest revenue			140		140
Baddebt expense			5,800	5,800
Salary expense			66,500	66,500
Utilities expense			14,500	14,500
Supplies expense			2,650	2,650
Totals	$             149,000	$             149,000		$      302,830	$      302,830