Adjusting and closing entries.
The Sager Marketing Research Company, owned by Jeff Sager, is retained by large companies to test consumer reaction to new products. On January 31, 2010, the firm’s worksheet showed the following adjustments data: (a) supplies used, $1,120; (b) expired rent, $6,000; and (c) depreciation on office equipment, $2,240. The balances of the revenue and expense accounts listed in the Income Statement section of the worksheet and the drawing account listed in the Balance Sheet section of the worksheet are given below.
REVENUE AND EXPENSE ACCOUNTS |
|
401 Fees Income | $87,000 Cr. |
511 Depr. Expense—Office Equipment | 2,240 Dr. |
514 Rent Expense | 6,000 Dr. |
517 Salaries Expense | 46,200 Dr. |
520 Supplies Expense | 1,120 Dr. |
523 Telephone Expense | 985 Dr. |
526 Travel Expense | 9,280 Dr. |
529 Utilities Expense | 920 Dr. |
DRAWING ACCOUNT |
|
302 Jeff Sager, Drawing | 5,400 Dr. |
INSTRUCTIONS
1. Record the adjusting entries in the general journal, page 3.
2. Record the closing entries in the general journal, page 4.
Analyze: What closing entry is required to close a drawing account?
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