Prepare the Necessary Closing Entries Based on the Following Selected

question 166

Essay

Prepare the necessary closing entries based on the following selected accounts. $\begin{array}{lrr} \text { Accumulated Depreciation} &\$10,000\\ \text {Depreciation Expense } &6,000\\ \text { Owner's Capital } &20,000\\ \text {Owner's Drawings } &9,000\\ \text { Salaries and Wages Expense } &19,000\\ \text { Service Revenue} &40,000\\\end{array}$

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Definitions:

Fixed Costs

Expenses that do not vary with the level of production or sales within a certain range.

Traceable Fixed Expenses

Fixed costs that can be directly associated with a specific business segment or operation.

Segment Margin

The amount of profit or loss generated by a particular segment of a business, after accounting for the direct costs and traceable fixed costs associated with that segment.

Absorption Costing

A method of costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.