Rita Company uses a perpetual inventory system. The adjusted trial balance of

Royal RitaRoyal Rita Company follow: Journalize the closing entries at

December 31.

Post to the Income Summary account as an accuracy check on net income. Recall that the credit balance closed out of Income Summary should equal net income as computed on the income statement. Also post to Retained Earnings, whose balance should agree with the amount reported on the balance sheet.

Begin by journalizing the closing entries