All Revenue and Expense Accounts Have Been Closed at the End

question 217

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 $530,000 and total credits of $600,000. As of the same date, Retained Earnings has a balance of $115,000, and the Dividends account has a balance of $48,000.
Instructions
(a) Journalize the entries required to complete the closing of the accounts.
(b) Prepare a retained earnings statement for the year ended December 31, 2018.

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Definitions:

Revenue Variance

The difference between actual revenue and budgeted or forecasted revenue.

Activity Level

A measure of the volume of production or services activity within a company, often used to allocate variable costs.

Revenue Variance

The difference between the actual revenue earned and the budgeted or expected revenue, indicating the effectiveness of sales strategies and market conditions.

Activity Level

A measure of the amount of work performed or units produced, used often in costing to allocate fixed costs properly.