What are the closing entries?

i. Closing Entry #1: Close ALL revenues to Income Summary. The credit to Income Summary will therefore represent Sales Rev + Service Rev + Interest Rev for the

period.

ii. Closing Entry #2: Close ALL expenses to Income Summary. Every individual expense, loss, sales returns & discounts account must be closed out with a credit, and the sum of all expenses/losses/returns & discounts can then be debited to your Income Summary in this entry.

iii. Closing Entry #3: Take the difference between the credit posted to Income Summary (Closing Entry #1) less the debit posted to Income Summary (Closing Entry #2) to close out the Income Summary account and permanently move NI to R.E.

iv. Closing Entry #4: Close out the dividend directly to R.E.

v. Closing Entry #5: Close the Unrealized Gain-AFS (the account title that appears on your Comprehensive Income Statement) to Accumulated Other Comprehensive Income

(the equity account on the balance sheet). This closes out your Other Comprehensive Income (OCI) account & transfers its balance to your permanent Balance Sheet account "Accumulated Other Comprehensive Income". Just like NI is permanently closed into Retained Earnings, your OCI items from the current year also need to be closed out and permanently stored in the Accumulated OCI account under Stockholder's Equity on your Balance Sheet

General Ledger Account Name Trial Balance Before Adj 12/31/x1 AJEs at 12/31/x1 Trial Balance After Adj 12/31/x1 Closing Entries Post-Closing T/B 12/31/x1 Debit Credit Debit Credit Debit Credit Debit Credit Debit Credi Cash and cash equivalents 95,563 95,563 95,563 Accounts Receivable 913,780 104,850 808,930 808,930 Allowance for doubtful accounts 29,468 18,450 29,429 40,447 40,447 Interest Receivable 22,800 22,800 22,800 Inventory 1,270, 160 47,520 ,317,680 1,317,680 Prepaid expenses 26,780 21,424 5,356 5,356 Other Current Assets 16,063 16,063 16,063 Investments 160,500 60,500 160,50 Fair Value Adjustment 12,400 12,400 0 12,400 Notes Receivable 285,000 285,000 285,000 Building 876,418 876,418 876,418 Equipment and furniture 332,983 332,983 332,983 Land 348,791 348,791 348,791 Accum Depr 656,465 60,470 716,935 716,935 Goodwill 493,951 493,951 493,951 Patent 217,000 32,300 184,700 184,700 Accounts Payable 1,169,343 1, 169,343 1, 169,343 Dividends payable 220,000 220,000 220,000 Interest payable 31,572 10,524 42,096 42,096 Unearned Consulting Revenue 326,220 212,043 114,177 114,177 Wages payable 81,35 39,800 21, 150 121, 150 Payroll taxes payable 8.950 2.900 11,850 11,850 Income tax payable 216,767 216,767 216,767 Long term liabilities 701,600 701,600 701,600 Common Stock 920,00 20,000 920,000 Paid-in capital common stock 05,000 05,000 105,000 Treasury Stock 400,000 400,000 400,000 Retained Earnings 539,069 539,069 539,069 Dividends 0 O Accum Other Comprehensive Income 0 Sales revenue 9,253,346 86,400 , 166,946 9,166,946 Service revenue 1,169,385 212,043 ,381,428 1,381,428 Interest Revenue 22,800 22,800 22,800 Sales returns 162,400 162,400 162,400 Sales discounts 269,662 269,662 269,662 Product cost of goods sold 5,384,590 47,520 5,337,070 5,337,070 Service cost of goods sold 570,811 570,811 570,811 Advertising Expense 59,080 159,080 159,080 Bad debt expense 29,429 29,429 29,429 Depreciation and amortization 92,770 92,770 92,770 Professional Dues & subscriptions 21,470 21,470 21,470 Gain/loss on disposal 4,790 4,790 4,790 Income tax expense 216,767 216,767 216,767 Insurance Expense 30, 144 21,424 101,568 101.568 Interest expense 31,572 10,524 42,096 42,096 Legal and accounting fees 06,650 06,650 106,650 Miscellaneous 9,048 9.048 9.048 Office expense 220, 114 220, 114 220, 114 Payroll taxes 136,975 2,900 139,875 139,875 Property taxes 04,570 04,570 104,570 Repair and maintenance 42,028 42,02 42,028 Research and development 70,680 470,680 470,680 Telephone 20,085 20,085 20,085 Travel and entertainment 38,391 38,391 38,391 Utilities Expense 7,049 47,049 47,049 Wage Expense 964,670 39,80 1,004,470 ,004,470 Salaries - Officers 710,000 710,000 710,000 Income Summary 220,000 220,000 0 Unrealized Gain/Loss-AFS 0 0 12,400 0 12,400 0 12,400 4,991,768 14,991,768 1,033,227 1,033,227 15,502,008 15,502,008 15,282,008 15,502,008