Royston Realty reported the following accounts on its income statement:

Required
1. Prepare the necessary entries to close the temporary accounts.
2. Explain why the closing entries are necessary and when they should be recorded.

Transcribed Image Text:

Commissions Revenue Real Estate Board Fees Paid Computer Line Charge Depreciation on Computer Car Expenses $54,000 5,000 864 450 2,200 Travel and Entertainment Insurance Expired Advertising Expense Office Supplies Used $4,500 780 1,460 940