eBook Calculator Exercise 3-58 (Algorithmic) Preparation of Closing Entries James and Susan Morley recently converted a large tum-of-the-century house into a hotel and incorporated the business as Nanaimo Enterprises. Their accountant is inexperienced and has made the following closing entries at the end of Nanaimo's first year of operations: Income Summary 214,000 Service Revenue 181,000 Accumulated Depreciation 33,000 Depreciation Expense Income Tax Expense Utilities Expense Wages Expense Supplies Expense Accounts Payable Income Summary 33,000 8,200 13,000 66,000 31,000 4,500 155,700 58,300 Income Summary Retained Earnings 58,300 3,200 Dividends Declared Income Summary 3.200 Check My Work Previous Next 3,200 Income Summary Required: 1. and 2. Indicate what is wrong with the closing entries above by preparing the correct closing entries. Assume that all necessary accounts are presented above and that the amounts given are correct. For those boxes in which no entry is required, leave the box blank. Dec. 31 (Close revenue account) Dec. 31 (Close expense accounts) Dec. 31 (Close Income Summary) Dec. 31 Check My Work Previous Next > eBook Calculator (Close revenue account) Dec. 31 (Close expense accounts) Dec 31 (Close Income Summary) Dec. 31 (Close Dividends Declared) 3. CONCEPTUAL CONNECTION: Why closing entries are necessary? The purpose of closing entries is to transfer the balances in the accounts to retained earnings. The accounts to be are closed are Check My Work Previous N All work saved Email Instructor Save and Exit Submit Assignment for