An Adjusted Trial Balance a Merchandiser Is Given Below - Provide Journal Entries to Close the Income Summary Account

question 191

Essay

An adjusted trial balance a merchandiser is given below.
$$\begin{array} { | l | r | r | } \hline & { \text { Debit } } &{ \text { Credit } } \\\hline \text { Cash } & \$ 12,600 & \\\hline \text { Accounts Receivable } & 2,400 & \\\hline \text { Prepaid Rent } & 800 & \\\hline \text { Merchandise Inventory } & 30,000 & \\\hline \text { Accounts Payable } & & \$ 4,200 \\\hline \text { Salaries Payable } & & 1,000 \\\hline \text { Notes Payable } & & 800 \\\hline \text { Common Stock } & & 10,000 \\\hline \text { Retained Earnings } & & 3,800 \\\hline \text { Dividends } &1,000 & \\ \hline \text { Sales Revenue } & &96,000 \\\hline \text { Sales Returns and } & & \\ \text { Allowances } &1,600 & \\\hline \text { Sales Discounts } & 400& \\\hline \text { Cost of Goods Sold } &23,000 & \\\hline \text { Salaries Expense } &21,000 & \\\hline \text { Rent Expense } & 14,000& \\\hline \text { Selling Expense } & 8,500\\\hline \text { Supplies Expense } & \underline { 500 } & \\\hline \text { Total } & \$ 115,800 & \$ 115,800 \\\hline\end{array}$$
- Provide journal entries to close the Income Summary account and the Dividends account.

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Definitions:

Stock of Other Companies

Securities representing partial ownership in other companies that can be held as investments by individuals or entities.

Cash Accounts

Cash accounts are financial accounts that keep track of cash transactions within an organization, including receipts, disbursements, and balances.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate revenues and expenses to the period in which they actually occurred.

Reversing Entry

An entry, made at the beginning of the next accounting period that is the exact opposite of the adjusting entry made in the previous period.