Problem

(L.OBJ. 3) Posting closing entries [5 min] It is December 31 and time for your business...

(L.OBJ. 3) Posting closing entries [5 min]

It is December 31 and time for your business to close the books. The following balances appear on the books of Cedrick Owens Enterprises.

a. Withdrawals, $11,000

b. Service revenue, $25,200

c. Expense account balances: Salary, $7,500; Rent, $3,000; Advertising, $2,200

Requirements

1. Set up each T-account and insert its adjusted balance as given (denote as Bal) at December 31. Also set up a T-account for Capital, $20,300, and for Income summary.

2. Post the closing entries co the accounts, denoting posted amounts as Clo.

3. Compute the ending balance of Capital.

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