James and Susan Morley recently converted a large turn-of-the-century house into a hotel and incorporated the business as Saginaw Enterprises. Their accountant is inexperienced and has made the following closing entries at the end of Saginaws first year of operations:

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General Journal

Prepare the correct closing entries. Assume that all necessary accounts are presented above and that the amounts given are correct.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

IMPACT ON FINANCIAL STATEMENTS

INCOME STATEMENT

BALANCE SHEET

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY	REVENUE	EXPENSES	NET INCOME
1		Closing Entries
2	Dec. 31	Income Summary		210,000.00
3		Service Revenue			177,000.00
4		Accumulated Depreciation			33,000.00
5	31	Depreciation Expense		33,000.00
6		Income Taxes Expense		8,200.00
7		Utilities Expense		12,700.00
8		Wages Expense		66,000.00
9		Supplies Expense		31,000.00
10		Accounts Payable		4,500.00
11		Income Summary			155,400.00
12	31	Income Summary		54,600.00
13		Retained Earnings			54,600.00
14	31	Dividends		3,200.00
15		Income Summary			3,200.00