4 On December 31, the Income Summary account of Davison Company has a debit bala

Question

4 On December 31, the Income Summary account of Davison Company has a debit balance of $21000 after revenue of $23,000 and expenses of $44,000 were closed to the account Michelle Davison, Drawing has a debit balance of $2,400 and Michelle Devison, Capital has a credit balance of $42,000 points Record the journal entries necessary to complete closing the accounts. 3 Answer is not complete. No Date General Journal Debit Credit Dec 31, 2016 Michelle Davison, Capital 21,000 21,000 2 Dec 31, 2016 Michelle Davison, Capital 2,400 Michelle Davison, Drawing 2,400 What is the new balance of Michelle Davison, Capita? Answer is complete but not entirely correct.

Explanation / Answer

Journal entries: No. Date Accounts title and explanations Debit $ Credit $ 1 31.12 Michelle Davison Capital Dr. 21000    Income Summary 21000 2 31.12 Michelle davison Capital Dr. 2400    Michelle davison Drawings 2400 Michelle davison capital: Beginning balance of capital 42000 Less: Net loss during the year -21000 Less: Withdrawls during the year -2400 Ending balance of capital 18600

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