Mastery Problem: The Accounting Cycle. Chandler, Inc. Chandler, Inc. is owned by Roscoe Chandler and provides appraisal services to individuals and companies wishing to purchase and sell fine art. Chandler, Inc. began business on January 1, 2017, and is just completing its first year of business. Roscoe asks for your help in completing the accounting cycle for the company by assisting with the closing process. Adjusted Trial Balance Before the closing entries are journalized, you begin with an adjusted trial balance. The closing entries are essentially the link from the adjusted trial balance to the post-closing trial balance. Chandler, Inc. Adjusted Trial Balance December 31, 2017 Account Title Debit Balances Credit Balances Cash 93,000 Accounts Receivable 29,000 Prepaid Insurance 16,000 Office Equipment 60,000 Accumulated Depreciation Office Equipment 40,000 Accounts Payable 6,000 Salaries Payable 8,000 Income Taxes Payable 4,000 Common Stock 2,000 Retained Earnings 25,000 Dividends 5,000 Fees Earned 185,600 Rent Revenue 92,000 Interest Revenue 17,200 Salaries Expense 71,000 Selling Expense 25,600 Income Taxes Expense 15,000 Insurance Expense 17,000 Depreciation Expense 47,200 Miscellaneous Expense 1,000 379,800 379,800 The Closing Process Roscoe's Journal Roscoe has attempted to journalize the closing entries for Chandler, Inc. on this panel. He's not sure if he's journalized the entries correctly, and asks you to review them. You find that one entry is correct, but the other is incorrect. Determine which entry is incorrect, and journalize both closing entries for Chandler, Inc. as of Dec. 31. Journal Page 25 Date Description Post. Ref. Debit Credit Dec. 31 Retained Earnings 471,600 Fees Earned 185,600 Rent Revenue 92,000 Interest Revenue 17,200 Salaries Expense 71,000 Selling Expense 25,600 Income Taxes Expense 15,000 Depreciation Expense 47,200 Insurance Expense 17,000 Miscellaneous Expense 1,000 Dec. 31 Retained Earnings 5,000 Dividends 5,000 Journal Roscoe has attempted to journalize the closing entries for Chandler, Inc. on the Roscoe's Journal panel. He's not sure if he's journalized the entries correctly, and asks you to review them. You find that one entry is correct, but the other is incorrect. Determine which entry is incorrect, and journalize both closing entries for Chandler, Inc. as of Dec. 31. If an amount box does not require an entry, leave it blank. Dec. 31 Dec. 31