24. The term \"FOB\" denotes a. free on board. b. freight on board. c. free only
ID: 2573515 • Letter: 2
Question
24. The term "FOB" denotes a. free on board. b. freight on board. c. free only (to) buyer. d. freight charge on buyer. 25. Which of the following is an inventory costing method? a. Periodic b. FIFO c. Perpetual d. Lower of cost or market 2 Problems- Please show your work end y 1 Service Revenue $16,000. Salaries and Wage Expense $8,400. Maintenance and Repairs Expense $2,500 and Income Tax Expense $1,000. The Statement of Retained Earnings shows an opening balance for Retained Earnings of $20,000 and Dividends of $1,300. 1. The Income Statement for Lost Trails ATV Park for the mo Required: Prepare the closing entries.Explanation / Answer
24.
Correct answer is a. Free on Board
25.
Correct answer is b. FIFO
26.
Date
Account titles and explanation
Debit
Credit
Jul-31
Service revenue
$ 16,000.00
Income summary
$ 16,000.00
(To close the revenue accounts)
Jul-31
Income summary
$ 11,900.00
Salaries and wages expenses
$ 8,400.00
Maintenance and repair expenses
$ 2,500.00
Income tax expenses
$ 1,000.00
(To close the expense accounts)
Jul-31
Income summary
$ 1,300.00
Dividend
$ 1,300.00
(To close the dividend account)
Jul-31
Income summary ($16,900 - $11,900 - $1,300)
$ 2,800.00
Retained earnings
$ 2,800.00
(To close the income summary account)
Date
Account titles and explanation
Debit
Credit
Jul-31
Service revenue
$ 16,000.00
Income summary
$ 16,000.00
(To close the revenue accounts)
Jul-31
Income summary
$ 11,900.00
Salaries and wages expenses
$ 8,400.00
Maintenance and repair expenses
$ 2,500.00
Income tax expenses
$ 1,000.00
(To close the expense accounts)
Jul-31
Income summary
$ 1,300.00
Dividend
$ 1,300.00
(To close the dividend account)
Jul-31
Income summary ($16,900 - $11,900 - $1,300)
$ 2,800.00
Retained earnings
$ 2,800.00
(To close the income summary account)
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