From the Following Items in the Income Statement Columns of the Worksheet

question 14

Essay

From the following items in the income statement columns of the worksheet of Monaghan Company at December 31, prepare the closing entries without explanation, assuming that a $450 withdrawal was made during the period.
$$\begin{array}{l}\text { Income Statement }\\\begin{array} { l c c } \text { Account } & \text { Debit } & \text { Credit } \\\text { Service Revenue } & & 900 \\\text { Wages Expense } & 550 & \\\text { Rent Expense } & 250 & \\\text { Supplies Expense } & 100 & \\\text { Insurance Expense } & \underline { 50 } & \underline {} \\\text { } & 950 & 900 \\\text { Net Loss } & & \underline { 50 } \\& \underline { \underline { \$950 } }&\underline { \underline { \$950 } }\end{array}\end{array}$$

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Definitions:

Total Revenue

The complete revenue a company accrues from its sales activities or service offerings throughout a designated period.

Total Cost

The sum of fixed and variable costs incurred in the production of goods or services.

Profit-Maximizing Level

The point at which a business achieves the highest difference between total revenue and total cost, leading to maximum profit.

Profit-Maximizing Price

The price level at which a firm maximizes its profits by balancing its production costs with the perceived value to customers, ensuring the highest possible profit margin.