BE4-4 The ledger of Rios Company contains the following balances Retained Earnings Dividends Service Revenue Salaries and Wages Expense Supplies Expense Prepare the closing entries at December 31 $30,000 $2,000 $50,000 $27,000 $7,000 Recall that the purpose of the closing entries is to close out the temporary accounts of the company. Temporary accounts include Revenue Accounts, Expense Accounts and Dividends. Step 1 Identify the Temporary Accounts that fit this definition Dividends Service Revenue Salaries and Wages Expense Supplies Expense Step 2 Create the journal entries to close out these accounts Our rules: $2,000 $50,000 $27,000 $7,000 1. Given that Revenue has a natural credit balance, we will debit revenue accounts and credit the Income Summary account 2. Given that Expense has a natural debit balance, we will credit expense accounts and debit the Income Summary 3. The resulting balance in the income summary account is cleared to retained eamings 4. We also clear dividends directly to retained earnings. Step 3: Closing joumal entries (required for BE4-4 >> complete items in yellow) Number: above General Journal Account Titles Debit Credit $50,000 Example $50,000 1 Service Revenue Income Summary Explanation: To close Service Revenue Temporary account 2 Income Summary Salaries and Wages Expense Supplies Expense Explanation: To close the Expense Temporary Accounts 3 Balance in Retained Earnings ($50K-$34K) above BE4-4 & 4-5 ACCOUM TILUS 1 Service Revenue BE4-6 BE4-9 E4-9 DWUIL GIVUIL $50,000 Example $50,000 Income Summary Explanation: To close Service Revenue Temporary account 2 Income Summary Salaries and Wages Expense Supplies Expense Explanation: To close the Expense Temporary Accounts Explanation: To clear the Income Summary Balance to Retained Eamings ($50K-$34K) 4 Dividends Explanation: To close Dividends to Retained Earnings BE4-5-Using the data in BE4-4, enter the balances in T-accounts, post the closing entries and underline and balance the accounts. Note: Subtotals and Totals will automatically populate-you just need to plug in the entries from the problem above Service revenue 50,000 (1) 50,000 sub-total balance Salary and wage expense 27,000 Comment Supplies expense 7,000 (2) (2) 50,000 50,000 27,000 sub-total balance 27,000 sub-total balance 7,000 7,000 Income Summary 50,000 (1) (2) (3) sub-total balance 50,000 50,000 Dividends 2,000 (4) (4) 2.000 sub-total Retained Eamings 30,000 (3) 30,000 T View + Zoom Add Category Insert Table Chart Text Shape BE4-4 & 4-5 BE4-6 BE4-9 E4-9 BE4-6 The ledger of Weeping Willow Golf Club contains the following balances Service Revenue Expenses Salaries and Wages Expense Maintenance & Repairs Total expenses Net Income Prepare the closing entries at July 31 $16,400 $8,200 $2,500 $10,700 $5,700 Recall that the purpose of the closing entries is to close out the temporary accounts of the company. Temporary accounts include Revenue Accounts, Expense Accounts and Dividends. Step 1 Identify the Temporary Accounts that fit this definition Service Revenue Salaries and Wages Expense Maintenance & Repairs Step 2 = Create the journal entries to close out these accounts Our rules: $16,400 $8,200 $2,500 1. Given that Revenue has a natural credit balance, we will debit revenue accounts and credit the Income Summary account. 2. Given that Expense has a natural debit balance, we will credit expense accounts and debit the Income Summary 3. The resulting balance in the income summary account is cleared to retained earnings. 4. We also clear dividends directly to retained earnings. Step 3: Closing journal entries: Number above General Journal Account Titles 1 Service Revenue Income Summary Debit Credit Explanation: To close Service Revenue Temporary account 2 Income Summary Salaries and Wages Expense Maintenance & Repairs Explanation: To close the Expense Temporary Accounts 3 Income Summary Retained Earnings Eaminos ($16.4K-$10.7K) View Zoom + BE4-4 & 4-5 Add Category BE4-6 BE4-9 E4-9 Insert Table Chart Text Shape Media Comment Explanation: To clear the Income Summary Balance to Retained Eamings ($16.4K-$10.7K) Step 4: Post the entries to the revenue and expense accounts and complete the closing process using the three-column form of account Account Name: Date 7/30/19 Account Name: Date 7/30/19 Account Name: Date: 7/30/19 Account Name:" Date 7/30/19 7/30/19 7/30/19 Account Name: Date Revenue Explanation Ending balance Close to income summary Salary and Wage Expense Explanation Ending balance Close to income summary Maintenance & Repair Explanation Ending balance Close to income summary Income Summary Explanation Revenue posting Expense posting Close to retained earnings Account: P. R. Debit Credit 16,400.00 Balance 16,400.00 16,400.00 Account: P. R. Debit 8,200.00 Credit Balance 8.200.00 8,200.00 Account P. R. Debit 2,500.00 Credit Balance 2,500.00 2,500.00 Account: P.R. Debit Credit Balance Account: Retained earnings PR. Debit Credit Balance Explanation View Zoom + BE4-4 & 4-5 BE4-6 Add Catagory BE4-9 E4-9 + Insert Table Chart Text Shape Media Comment E4-9-Create an income Statement, Statement of Retained Earnings and a Classified Balance Sheet Plevin Company Adjusted Trial Balance 31-Jul-19 Number Account Titles 101 Cash 112 Accounts Receivable 157 Equipment Dr. Cr. 9,840 8,780 15,900 158 Accumulated Depreciation Equipment 7,400 201 Accounts Payable 4,220 208 Uneeamed Rent Revenue 1,800 311 Common Stock 20,000 320 Retained Earnings, 25,200 332 Dividends 16,000 400 Service Revenue 64,000 429 Rent Revenue 6,500 711 Depreciation Expense 8,000 726 Salaries and Wages Expense 55,700 732 Utilities Expense 14,900 Totals 129,120 129,120 (b) Plevin Company Income Statement For the Year Ended July 31, 2019 Revenues Service Revenue Rent Revenue Total Revenue Expenses Salaries and wages expense Depreciation expense Utilities Expense Total expenses Net Loss Pievin Company Retained Earnings Statement For the Year Ended July 31, 2019 $ -0 -0 $ -0 Complete the items highlighted in the brighter yellow color 125% View Zoom BE4-4 & 4-5 E Add Category BE4-6 BE4-9 For the Year Ended July 31, 2019 Revenues Service Revenue Rent Revenue Total Revenue Expenses Salaries and wages expense Depreciation expense Utilities Expense Total expenses Net Loss Plevin Company Retained Earnings Statement For the Year Ended July 31, 2019 Retained Earnings, August 1 Add: Net loss Less: Dividends Retained Earnings, March 31 Pievin Company Balance Sheet 31-Jul-19 Assets Current Assets Cash. Accounts receivable Total current assets Property, plant and equipment Equipment Less: Accumulated depreciation-equipme Total assets Liabilities and Stockholder's Equity Current liabilities Accounts Payable Unearned revenue Total current liabilities Stockholders' equity Common Stock Retained Earnings Total liabilities and stockholders' equity Insert Table Chart Text Shape E4-9 $ -0 -0 $ -0 $25,200 25,200 $ 25,200 $ -0 -0 $ 00 $ -0 $ 00 MacBook A