The adjusted trial balance for China Tea Company at December 31, 2018, is presen

Question

The adjusted trial balance for China Tea Company at December 31, 2018, is presented below:

Required:
Prepare the closing entries for China Tea Company for the year ended December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

1. Record the entry to close the revenue accounts using the income summary.

2. Record the entry to close the expense accounts using the income summary.

3. Record the entry to close the income summary account.

Debit Credit Cash 12,400 Accounts receivable 169,000 Prepaid rent 6,900 Inventory 44,000 Equipment 490,000 Accumulated depreciation - equipment 144,000 Accounts payable 49,000 Notes payable - due in three months 49,000 Salaries payable 5,900 Interest payable 2,900 Common stock 295,000 Retained earnings 91,800 Sales revenue 590,000 Costs of goods sold 275,000 Salaries expense 139,000 Rent expense 34,000 Depreciation expense 49,000 Interest expense 3,900 Advertising expense 4,400 Totals 1,227,600 1,227,600

Explanation / Answer

Closing Entries:

General Journal Debit Credit 1) Sales Revenue $590000      Income Summary $590000 2) Income Summary $505300     Cost of goods sold $275000     Salaries Expense $139000     Rent Expense $34000     Depreciation Expense $49000     Interest Expense $3900     Advertising Expense $4400 3) Income Summary $84700    Retained Earnings $84700

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