The year-end adjusted trial balance of the Timmons Tool and Die Corporation incl
ID: 2328775 • Letter: T
Question
The year-end adjusted trial balance of the Timmons Tool and Die Corporation included the following account balances: retained earnings, $225,000; sales revenue, $800,000; cost of goods sold, $500,000; salaries expense, $185,000; rent expense, $41,000; and interest expense, $16,000.
Prepare the necessary closing entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1. Record the entry to close the revenue accounts using the income salary.
2. Record the entry to close the expense accounts using the income summary.
3. Record the entry to close the income salary account.
Explanation / Answer
Answer:
Event
General Journal
Debit
Credit
1
Sales revenue
800,000
Income summary
800,000
(To. close the revenue accounts using the income salary.)
2
Income summary
742,000
Cost of goods sold Account
500,000
Salaries expense
185,000
Rent expense
41,000
Interest expense
16,000
(to close the expense accounts using the income summary)
3
Income summary (800,000-742,000)
58,000
Retained earnings
58,000
Event
General Journal
Debit
Credit
1
Sales revenue
800,000
Income summary
800,000
(To. close the revenue accounts using the income salary.)
2
Income summary
742,000
Cost of goods sold Account
500,000
Salaries expense
185,000
Rent expense
41,000
Interest expense
16,000
(to close the expense accounts using the income summary)
3
Income summary (800,000-742,000)
58,000
Retained earnings
58,000
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