All Revenue and Expense Accounts Have Been Closed at the End

question 67

Essay

All revenue and expense accounts have been closed at the end of the calendar year for Patton Company. The Income Summary account has total debits of $520,000 and total credits of $600,000. As of the same date, Dan Patton, Capital has a balance of $115,000, and Dan Patton, Drawing has a balance of $48,000.
Instructions
(a) Journalize the entries required to complete the closing of the accounts.
(b) Prepare an owner's equity statement for the year ended December 31, 2010.

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Definitions:

Direct Materials

These are raw materials that are directly traceable to the manufacturing of a product.

Direct Labour-Hours

The sum of working hours for employees actively participating in the manufacturing procedure.

Direct Materials

Raw materials that are directly traceable and integral to the finished product, and which can be directly allocated to the manufacturing process.

Finished Goods Inventory

Items that have completed the manufacturing process and are ready for sale to customers.