Problem

Journalizing and posting closing entries.On December 31, after adjustments, Cavazos Compan...

Journalizing and posting closing entries.

On December 31, after adjustments, Cavazos Company’s ledger contains the following account balances.

101	Cash	$37,200 Dr.
111	Accounts Receivable	16,800 Dr.
121	Supplies	3,000 Dr.
131	Prepaid Rent	39,600 Dr.
141	Equipment	54,000 Dr.
142	Accumulated Depreciation—Equip.	1,500 Cr.
202	Accounts Payable	7,500 Cr.
301	Monica Cavazos, Capital (12/1/2010)	55,620 Cr.
302	Monica Cavazos, Drawing	7,200 Dr.

INSTRUCTIONS

1. Record the balances in the ledger accounts as of December 31.

2. Journalize the closing entries in the general journal, page 4. Use account number 399 for the Income Summary Account.

3. Post the closing entries to the general ledger accounts.

Analyze: What is the balance of the Salaries Expense account after closing entries are posted?

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