Need help with closing entries. ADJUSTED INCOME BALANCE ACCT ACCOUNT YEAR-END AD
ID: 2584015 • Letter: N
Question
Need help with closing entries.
ADJUSTED
INCOME
BALANCE
ACCT
ACCOUNT
YEAR-END ADJUSTMENTS
TRIAL BALANCE
STATEMENT
SHEET
NO.
TITLE
ID #
DEBIT
ID #
CREDIT
DEBIT
CREDIT
DEBIT
CREDIT
DEBIT
CREDIT
ASSETS
10100
Cash
93,304.29
93,304.29
10200
Accounts receivable
48,149.00
48,149.00
10300
Allowance for doubtful accounts
3,028.74
1,879.55
1,879.55
10400
Inventory
90,286.00
191,967.00
191,967.00
10600
Marketable securities
24,000.00
24,000.00
10800
Fixed assets
331,731.40
331,731.40
10900
Accumulated depreciation
35,023.64
116,583.14
116,583.14
LIABILITIES
20100
Accounts payable
7,952.01
7,952.01
20300
Federal income taxes withheld
1,450.00
1,450.00
20400
State unemployment taxes payable
110.44
110.44
20500
Federal unemployment taxes payable
18.67
18.67
20600
F.I.C.A. taxes payable
2,229.32
2,229.32
20700
Federal incomes taxes payable
54,837.12
54,837.12
54,837.12
20900
Interest payable
156.16
156.16
156.16
21000
Notes payable
60,000.00
60,000.00
STOCKHOLDERS' EQUITY
26000
Common stock
225,000.00
225,000.00
29000
Retained earnings
90,264.99
90,264.99
REVENUE AND GROSS PROFIT
30100
Sales
1,590,883.00
1,590,883.00
30200
Sales returns and allowances
61,106.00
61,106.00
30300
Sales discounts taken
15,405.82
15,405.82
30400
Cost of goods sold
1,026,379.96
1,026,379.96
1,026,379.96
30500
Purchases
1,128,159.00
0.00
0.00
30600
Purchases returns and allowances
19,445.00
0.00
0.00
30700
Purchases discounts taken
16,554.48
0.00
0.00
30800
Freight-in
24,506.44
0.00
0.00
31200
Miscellaneous revenue
825.00
825.00
EXPENSES
40100
Rent expense
57,600.00
57,600.00
40200
Advertising expense
22,275.00
22,275.00
40300
Office supplies expense
5,664.91
5,664.91
40400
Depreciation expense
35,023.64
35,023.64
35,023.64
40500
Wages and salaries expense
140,663.35
140,663.35
40600
Payroll tax expense
11,611.26
11,611.26
40700
Federal income tax expense
54,837.12
54,837.12
54,837.12
40800
Interest expense
156.16
156.16
156.16
40900
Bad debt expense
3,028.74
3,028.74
3,028.74
41000
Other operating expense
0.00
29,285.75
29,285.75
Sub-totals
1,463,037.71
1,591,708.00
689,151.69
560,481.40
Net Income (Loss)
--------
-----------------
--------
-----------------
-----------------
-----------------
128,670.29
128,670.29
TOTALS
1,245,711.10
1,245,711.10
2,152,189.40
2,152,189.40
1,591,708.00
1,591,708.00
689,151.69
689,151.69
ADJUSTED
INCOME
BALANCE
ACCT
ACCOUNT
YEAR-END ADJUSTMENTS
TRIAL BALANCE
STATEMENT
SHEET
NO.
TITLE
ID #
DEBIT
ID #
CREDIT
DEBIT
CREDIT
DEBIT
CREDIT
DEBIT
CREDIT
ASSETS
10100
Cash
93,304.29
93,304.29
10200
Accounts receivable
48,149.00
48,149.00
10300
Allowance for doubtful accounts
3,028.74
1,879.55
1,879.55
10400
Inventory
90,286.00
191,967.00
191,967.00
10600
Marketable securities
24,000.00
24,000.00
10800
Fixed assets
331,731.40
331,731.40
10900
Accumulated depreciation
35,023.64
116,583.14
116,583.14
LIABILITIES
20100
Accounts payable
7,952.01
7,952.01
20300
Federal income taxes withheld
1,450.00
1,450.00
20400
State unemployment taxes payable
110.44
110.44
20500
Federal unemployment taxes payable
18.67
18.67
20600
F.I.C.A. taxes payable
2,229.32
2,229.32
20700
Federal incomes taxes payable
54,837.12
54,837.12
54,837.12
20900
Interest payable
156.16
156.16
156.16
21000
Notes payable
60,000.00
60,000.00
STOCKHOLDERS' EQUITY
26000
Common stock
225,000.00
225,000.00
29000
Retained earnings
90,264.99
90,264.99
REVENUE AND GROSS PROFIT
30100
Sales
1,590,883.00
1,590,883.00
30200
Sales returns and allowances
61,106.00
61,106.00
30300
Sales discounts taken
15,405.82
15,405.82
30400
Cost of goods sold
1,026,379.96
1,026,379.96
1,026,379.96
30500
Purchases
1,128,159.00
0.00
0.00
30600
Purchases returns and allowances
19,445.00
0.00
0.00
30700
Purchases discounts taken
16,554.48
0.00
0.00
30800
Freight-in
24,506.44
0.00
0.00
31200
Miscellaneous revenue
825.00
825.00
EXPENSES
40100
Rent expense
57,600.00
57,600.00
40200
Advertising expense
22,275.00
22,275.00
40300
Office supplies expense
5,664.91
5,664.91
40400
Depreciation expense
35,023.64
35,023.64
35,023.64
40500
Wages and salaries expense
140,663.35
140,663.35
40600
Payroll tax expense
11,611.26
11,611.26
40700
Federal income tax expense
54,837.12
54,837.12
54,837.12
40800
Interest expense
156.16
156.16
156.16
40900
Bad debt expense
3,028.74
3,028.74
3,028.74
41000
Other operating expense
0.00
29,285.75
29,285.75
Sub-totals
1,463,037.71
1,591,708.00
689,151.69
560,481.40
Net Income (Loss)
--------
-----------------
--------
-----------------
-----------------
-----------------
128,670.29
128,670.29
TOTALS
1,245,711.10
1,245,711.10
2,152,189.40
2,152,189.40
1,591,708.00
1,591,708.00
689,151.69
689,151.69
Explanation / Answer
Closing entries are entries created at the end of the year to show accurate results and true picture of financial positions. So all the year end adjustments done in question is done with closing entries which are as follows: 1 Allowance for doubtful accounts Bad debts A/c_______Dr 3028.74 To Allowance for doubtful debts A/c 3028.74 2 Closing Inventory Inventory A/c______Dr 90286 To Cost of Goods Sold A/c 90286 (Purpose is to reduce cost of goods sold since whatever was purchased was already debited in COGS. So for unslod i.e. closing inventory revenue will be booked next year. And hence cost to be added to COGS of next year.) (Since question requires sixth entry to be done, this entry is just for understanding purpose) 3 Deprecitaion A/c_______Dr 35023.64 To Accumulated depreciation A/c 35023.64 4 Income Tax expense A/c___Dr 54837.12 To Federal income taxes payable 54837.12 5 Interest expense A/c_____Dr 156.16 To Interest payable A/c 156.16 6 Cost of Goods sold A/c____Dr 10,26,379.96 Inventory A/c______Dr 90,286.00 Purchase Discounts taken A/c___Dr 16,554.48 Purchases returns and allowances A/c___Dr 19,445.00 To Purchases A/c 11,28,159.00 To Freight-in A/c 24,506.44 ***End of Answer***