Question 3

1. Prepare the required closing entries for the following selected accounts from the records of ShipIT

Transportation Inc. at December 31, 2016.

Cost of services sold	$11,600
Accumulated depreciation	17,800
Selling, general, and administrative expense	6,900
Retained earnings, December 31, 2015	1,900
Service revenue	23,600
Depreciation expense	4,100
Other revenue	600
Income tax expense	400
Dividends	400
Income tax payable	300

2. How much net income did ShipIT Transportation Inc. earn during the year ended December 31, 2016? Prepare a T-account for Retained Earnings to show the December 31, 2016 balance of Retained Earnings.