Closing entries transfer the revenues, expenses, and dividends balance to retained earnings account, to prepare the books of the company for the next period. Initially, the revenues and expenses are transferred first to an account known as an Income summary account. The income summary account is like a temporary account that shows the amount of net income or loss for the current period. Its ending balance is transferred to the retained earnings account. The closing entries.

Question

Want to see the full answer?

Answer 1

Question

Chapter 4, Problem 4.10SE

To determine

Concept Introduction: Closing entries transfer the revenues, expenses, and dividends balance to retained earnings account, to prepare the books of the company for the next period. Initially, the revenues and expenses are transferred first to an account known as an Income summary account. The income summary account is like a temporary account that shows the amount of net income or loss for the current period. Its ending balance is transferred to the retained earnings account.

The closing entries.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Preparing and Analyzing Closing Entries At December 31, the ledger of Aulani Company includes the following accounts, all having normal balances: Sales Revenue, $63,500; Cost of Goods Sold, $33,300; Retained Earnings, $20,000; Interest Expense, $3,200; Dividends (declared and paid), $5,000; Wages Expense, $8,000, and Interest Payable, $2,100. Required: 1. Prepare the closing entries for Aulani at December 31. If an amount box does not require an entry, leave it blank. Dec. 31 Sales Revenue Retained Earnings Dec. 31 Retained Earnings Cost of Goods Sold Interest Expense Wages Expense Dec. 31 Retained Earnings Dividends Feedback Check My Work 000 00 00 2. How does the closing process affect Aulani's retained earnings?

Closing Entries with Net Income Assume that the entry closing total revenues of $267,600 and total expenses of $199,700 has been made for the year ending December 31. At the end of the fiscal year, Teresa Schafer, Capital has a credit balance of $310,000 and Teresa Schafer, Drawing has a balance of $26,000. a. Journalize the entry required to close the Teresa Schafer, Drawing account. If an amount box does not require an entry, leave it blank. fill in the blank 81aa79023053f98_2 fill in the blank 81aa79023053f98_3 fill in the blank 81aa79023053f98_5 fill in the blank 81aa79023053f98_6 b. Determine the amount of Teresa Schafer, Capital at the end of the period.$fill in the blank cad9ad026ff3041_1

Preparing and Analyzing Closing Entries At December 31, the ledger of Aulani Company includes the following accounts, all having normal balances: Sales Revenue, $59,800; Cost of Goods Sold, $31,400; Retained Earnings, $20,000; Interest Expense, $3,200; Dividends (declared and paid), $5,000; Wages Expense, $8,000, and Interest Payable, $2,100. Required: Prepare the closing entries for Aulani at December 31. If an amount box does not require an entry, leave it blank. How does the closing process affect Aulani's retained earnings?