Preparing closing entries
The following financial information was taken from the books of Better Shape Health Club, a small spa and health club.
Account Balances as of December 31,2011 | |
Accounts Receivable | $16,150 |
Accounts Payable | 5,500 |
Salaries Payable | 2,150 |
Cash | 20,725 |
Dividends | 1,750 |
Operating Expense | 31,550 |
Prepaid Rent | 600 |
Rent Expense | 4,200 |
Retained Earnings 1/1/2011 | 32,650 |
Salaries Expense | 11,200 |
Service Revenue | 48,400 |
Supplies | 450 |
Supplies Expense | 4,240 |
Common Stock | 6,515 |
Unearned Revenue | 8,050 |
Land | 12,400 |
Required
a. Prepare the journal entries necessary to close the temporary accounts at December 31, 2011, the Better Shape Health Club.
b. What is the balance in the Retained Earnings account after the closing entries are posted?
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