1. K. Canopy, the proprietor of Canopy Services, withdrew $5,100 from the busine
ID: 2571629 • Letter: 1
Question
1. K. Canopy, the proprietor of Canopy Services, withdrew $5,100 from the business during the current year. The entry to close the withdrawals account at the end of the year is:
2. Tara Westmont, the proprietor of Tiptoe Shoes, had annual revenues of $196,000, expenses of $109,200, and withdrew $22,400 from the business during the current year. The owner’s capital account before closing had a balance of $308,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is:
Explanation / Answer
1) k.canopy,the proprietor of canopy service withdrew $5100 from the business during the current year
Entry to close withdrawal account
Capital (proprietor personal) A/c $5100(dr)
To cash account $5100(cr)
2) begining retained earnings+ Revenue-expenses-dividents=ending retained earnings
$308,000+$196,000-$109,200-$22,400=$372,400
Entry
Income summary account(dr) $ $372,400
revenue account(cr) $372,000
Owners capital account after closing:
Balance before closing =$308,000
Add: net profit current year ($196,000-$109,200) =$86,800
Less: withdrawls =-$22,400
Closing capital account balance =$372,400
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