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20. Use the adjusted trial balance below and prepareclosing entries as of Decemb

ID: 2589347 • Letter: 2

Question

20. Use the adjusted trial balance below and prepareclosing entries as of December 31, 2016:

                                                                 DR                          CR

Cash………………………………        $125,000

Accountsreceivable…………. ……         75,000

Allowance for doubtfulaccts………………………………….5,000

Equipment…………………………….…750,000

Accumulateddepreciation………………………………….150,000

Accounts payable……………………………………………..50,000

Notes payable………………………………………………..250,000

Common stock……………………………………………….300,000

Retainedearnings……………………………………………100,000

Dividends………………………………….10,000

Service revenue……………………………………………….500,000

Salaryexpense………………………….300,000

Rentexpense……………………………..75,000

Supplies expense…………………………20,000

Total                                        $1,355,000          $1,355,000

Closing Entries:

Explanation / Answer

Closing entries

Credit

Date Accounts & Explanation Debit

Credit

a) Service revenue 500000 Income summary a/c 500000 (To record close of revenue account) b) Income summary a/c 395000 Salaryexpense 300000 Rent expenses 75000 Supplies expenses 20000 (To record close of expenses a/c) c) Income summary a/c 105000 Retained earnings a/c 105000 (To record close of income summary a/c) d) Retained earnings a/c 10000 Dividends a/c 10000 (To record dividend account)