On the Basis of the Following Data Taken from the Adjusted

question 115

Essay

On the basis of the following data taken from the adjusted trial balance columns of the worksheet for the year ended December 31 for Painting the Perfect Picture, journalize the four closing entries in the proper order.
$$\begin{array} { l r r } \text { Account } & \text { Debit } & \text { Credit } \\\text { Cash } & 27,000 & \\\text { Accounts Receivable } & 67,000 & \\\text { Supplies } & 7,000 & \\\text { Equipment } & 200,000 & \\\text { Accumulated Depreciation } & & 70,0000 \\\text { Accounts Payable } & & 37,000 \\\text { Capital } & & {200,250}\\\text { Withdrawals } & 25,000 & \\\text { Fees Earned } & & 100,000\\\text { Salary Expense } & 27,000 & \\\text { Rent Expense } & 17,500 & \\\text { Depreciation Expense } & 20,000 & \\\text { Supplies Expense } & 12,500 & \\\text { Miscellaneous Expense } & \underline { 4,250 } \\\text { Total } & \underline { \underline { 407,250 } } & \underline { \underline { 407,250 } } \\\end{array}$$

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Definitions:

Absorption Costing

A method of accounting for all the costs associated with manufacturing a product, including all direct costs and fixed and variable overhead expenses.

Variable Costing

An accounting approach where only variable manufacturing costs are included in product costs, excluding fixed manufacturing overhead.

Fixed Costs

Costs that do not change with the level of production or sales, such as rent, salaries, and insurance premiums.

Absorption Costing

An accounting method that includes all manufacturing costs, both fixed and variable, in the cost of a product.