Please help. The red is wrong i need the right answer. Your answer is partially
ID: 2339840 • Letter: P
Question
Please help. The red is wrong i need the right answer.
Your answer is partially correct. Try again Presented below is information related to Gonzales Corporation for the month of January 2017 Cost of goods sold Delivery expense Insurance expense Rent expense $208,000 7,000 12,000 20,000 Salaries and wages expense Sales discounts Sales returns and allowances Sales revenue $61,000 8,000 13,000 350,000 Prepare the necessary closing entries. (Credit account titles are automatically indented when amount is entered. Do no manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) No. Date Account Titles and Explanation 1. Jan. 31 Sales Revenue Debit Credit 350000 Income Summary 350000 (To close revenue accounts) 2. Jan. 31 Income Summary 208000 Cost of Goods Sold 208000 Delivery Expense 12000 12000 Insurance Expense 12000Explanation / Answer
Answer
>Revenue accounts (having credit balances) are closed by debiting them, and crediting Income Summary.
>Expenses account (having debit balances) are closed by crediting them, and debiting Income Summary. This also applies to contra revenue accounts like Sales discount.
>Drawings is closed by debiting Retained earnings and Crediting Drawings account.
>In Case of Net Income, retained earnings is credited and Income Summary is debited; In Case of Net Loss, the entry gets reversed.
No.
Date
Accounts title
Debit
Credit
1
Jan-31
Sales Revenue
$ 350,000.00
Income Summary
$ 350,000.00
(to close revenue account)
2
Jan-31
Income Summary
$ 329,000.00
Cost of Goods Sold
$ 208,000.00
Delivery Expense
$ 7,000.00
Insurance Expenses
$ 12,000.00
Rent Expense
$ 20,000.00
Salaries & Wages expenses
$ 61,000.00
Sales discounts
$ 8,000.00
Sales Return & Allowances
$ 13,000.00
(to close expenses account)
Jan-31
Income Summary
$ 21,000.00
Retained Earnings
$ 21,000.00
(To close Net Income balance)
No.
Date
Accounts title
Debit
Credit
1
Jan-31
Sales Revenue
$ 350,000.00
Income Summary
$ 350,000.00
(to close revenue account)
2
Jan-31
Income Summary
$ 329,000.00
Cost of Goods Sold
$ 208,000.00
Delivery Expense
$ 7,000.00
Insurance Expenses
$ 12,000.00
Rent Expense
$ 20,000.00
Salaries & Wages expenses
$ 61,000.00
Sales discounts
$ 8,000.00
Sales Return & Allowances
$ 13,000.00
(to close expenses account)
Jan-31
Income Summary
$ 21,000.00
Retained Earnings
$ 21,000.00
(To close Net Income balance)