The Following Is the Adjusted Trial Balance as of December

question 28

Essay

The following is the adjusted trial balance as of December 31, 2019 of Wilson Repair Services, Inc., after the first year of operations:
$\begin{array}{|l|c|c|}\hline\text { Accounts } & \text { Debit } & \text { Credit }\\\hline \text { Cash } & \$ 18,000 & \\\hline \text { Accounts Receivable } & 30,000 & \\\hline \text { Prepaid Instrance } & 9,000 & \\\hline \text { Office Supplies } & 3,200 & \\\hline \text { Land } & 45,000 & \\\hline \text { Building } & 165,000 & \\\hline \text { Accumulated Depreciation-Building } & & \$ 12,000 \\\hline \text { Equipment } & 88,000 & \\\hline \text { Accumulated Depreciation-Equipment } & & 8,500 \\\hline \text { Accounts Payable } & & 12,000 \\\hline \text { Salaries Payable } & & 2,000 \\\hline \text { Unearned Revenue } & & 25,000 \\\hline \text { Mortgage Payable } & & 100,000 \\\hline \text { Common Stock } & & 21,290 \\\hline \text { Dividends } & 25,840 & \\\hline \text { Service Revenue } & & 325,000 \\\hline \text { Salaries Expense } & 63,000 & \\\hline \text { Depreciation Expense-Building and Equipment } & 6,250 & \\\hline \text { Supplies Expense } & 15,000 & \\\hline \text { Insurance Expense } & 14,500 & \\\hline \text { Utilities Expense } & 23,000 & \\\hline \text { Total } & \$ 505,790 & \$ 505,790 \\\hline\end{array}$
Prepare the closing entry for the Income Summary account. Omit explanation.

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Definitions:

Notes Receivable

Financial claims against others that are documented by formal legal instruments indicating a right to receive payments.

Journal Entry

A record of the financial transactions in the accounting books of a business, showing the accounts and amounts debited and credited.

Net Realizable Value

The estimated selling price of inventory in the ordinary course of business minus any costs of completion, disposal, and transportation.

Allowance for Doubtful Accounts

This is a contra account that reduces accounts receivable to reflect the estimated amount of debts that may not be collected.