P3-74B. (Learning Objective 5: Making closing entries; evaluating retained earnings) The accounts of Silent Stream Service, Inc., at March 31, 20X6, are listed in alphabetical order.

Requirements 1. All adjustments have been journalized and posted, but the closing entries have not yet been made. Journalize Silent Stream’s closing entries at March 31, 20X6.
2. Set up a T-account for Retained Earnings and post to that account. Then compute Silent Stream’s net income for 20X6. What is the ending balance of Retained Earnings?
3. Did Retained Earnings increase or decrease during the year? What caused the increase or decrease?

Transcribed Image Text:

Accounts payable.......... $ 14,800 Note payable, long term... $ 5,900 Accounts receivable. 16,900 Other assets. 14,000 Accumulated depreciation- Prepaid expenses. 5,800 equipment. 7,200 Retained earnings, Advertising expense........... 11,200 March 31, 20X5 22,500 Cash............. 7,200 Salary expense..... 18,200 Current portion of note Salary payable.. 2,600 payable.......... 500 Service revenue.. 95,600 Depreciation expense..... 2,200 Share capital........ 6,200 Dividends.... 30,000 Supplies........ 3,300 Equipment.... 44,000 Supplies expense.... 4,500 Interest expense..... 900 Unearned service revenue... 2,900