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:

Direct Materials

Raw materials that can be directly traced to the production of goods, considered a variable cost.

Production Department

A division within a company responsible for the actual production of the goods or services the company sells, involving processes like manufacturing, assembly, or processing.

Nonfinancial Performance Measures

Metrics used to assess a company's operational and managerial performance that do not involve monetary values, such as customer satisfaction or employee turnover rates.

Financial Measures

These are metrics used to assess a company's financial performance and health, such as profit margins, return on investment, and liquidity ratios.