I really need help in figuring out what I am missing in the T-account section. A

Question

I really need help in figuring out what I am missing in the T-account section.

Accounts Receivable Allowance for Doubtful Accounts Inventory (45 units) $20,570 Unearned Revenue (40 units) $ 11,600 Accounts Payable (Jan Rent) $ (1,550) Notes Payable $ 4,050 Contributed Capital $5,000 $2,600 $16,500 $6,300 4,270 Retained Earnings-Feb 1, 2012 . WWC establishes a policy that it will sell inventory at $150 per unit. . In January, WWC received a $5,000 advance for 40 units, as reflected in Unearned Revenue WWC's February 1 inventory balance consisted of 45 units at a total cost of $4,050. . wwC's note payable accrues interest at a 12% annual rate. wwcwluse hOrmethd adn perpetual bais

Explanation / Answer

You need to transfer the revenue and expenses balances to income summery account and close the income summery by transferring net income to retained earnings. you have to debit dividends to retained earning to transfer closing balance of retained earning to balance sheet.

Your accounts will not tally without above exercise. This excercise is necessary to prepare financial statement. These entries are also known as Closing Entries.

Thank You.

Debit income summery account by crediting all the balances of expense account.

Credit Income summery account by debiting all the balances of revenue account.

Transfer difference between the above two entries into retained earning by debit to Income summery account and credit to REtained earning if there is positive net income and If there is loss reverse the above entry. Now debit retained earning and credit dividends for transfer of dividends to retained earning. Rest will be OK

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