Refer to E4-16. 

Data From E4-16.

Mint Cleaning Inc. prepared the following unadjusted trial balance at the end of its second year of operations, ending December 31, 2017. To simplify this exercise, the amounts given in the unadjusted trial balance are in thousands of dollars. 

Other data not yet recorded at December 31, 2017, is as follows: a. Insurance expired during 2017, $5 

b. Depreciation expense for 2017, $4 

c. Wages payable, $7 

d. Income tax expense, $9 

Required: 

Using the adjusted balances in E4-16, give the closing journal entry for 2017. What is the purpose of “closing the books” at the end of the accounting period?

Transcribed Image Text:

Account Titles Debit Credit Cash $ 38 Accounts Receivable Prepaid Insurance Machinery 80 Accumulated Depreciation $ O Accounts Payable Contributed Capital Retained Earnings 76 4 Sales Revenue 80 Administrative Expenses 26 Wages Expense 10 Totals $169 $169