Prepare the necessary closing entries. Calculate the ending balance of Retained
ID: 2342725 • Letter: P
Question
Prepare the necessary closing entries.
Calculate the ending balance of Retained Earnings. Seminoles Corporation's fiscal year-end is December 31, 2015. The following is a partial adjusted trial balance as of December 31. Accounts Debit Credit $30,000 50,000 Retained Earnings Dividends Service Revenue Interest Revenue Salaries Expense Rent Expense Advertising Expense Depreciation Expense Interest Expense $3,000 6,000 15,000 6,000 3,000 11,000 5,000 Prepare the necessary closing entries Calculate the ending balance of Retained Earnings.
Explanation / Answer
Answer
Transaction
Accounts title
Debit
Credit
1
Service revenue
$ 50,000.00
Interest Revenus
$ 6,000.00
Income Summary
$ 56,000.00
(revenue accounts closed)
2
Income Summary
$ 40,000.00
Salaries expenses
$ 15,000.00
Rent Expenses
$ 6,000.00
Advertising Expenses
$ 3,000.00
Depreciation expense
$ 11,000.00
Interest Expenses
$ 5,000.00
(expenses account closed)
3
Income Summary [56000 – 40000]
$ 16,000.00
Retained earnings
$ 16,000.00
(Net Income balance of Income Summary Closed)
4
Retained Earnings
$ 3,000.00
Dividends
$ 3,000.00
(Dividend account closed)
Statement of Retaiend Earnings
Retained Earnings Beginning Balance
$ 30,000.00
Add: Net Income
$ 16,000.00
Less: Dividends
$ 3,000.00
Net Increase in retained Earnings
$ 13,000.00
Retained Earnings Ending Balance
$ 43,000.00 = Answer
Transaction
Accounts title
Debit
Credit
1
Service revenue
$ 50,000.00
Interest Revenus
$ 6,000.00
Income Summary
$ 56,000.00
(revenue accounts closed)
2
Income Summary
$ 40,000.00
Salaries expenses
$ 15,000.00
Rent Expenses
$ 6,000.00
Advertising Expenses
$ 3,000.00
Depreciation expense
$ 11,000.00
Interest Expenses
$ 5,000.00
(expenses account closed)
3
Income Summary [56000 – 40000]
$ 16,000.00
Retained earnings
$ 16,000.00
(Net Income balance of Income Summary Closed)
4
Retained Earnings
$ 3,000.00
Dividends
$ 3,000.00
(Dividend account closed)