Use EMBG\'s adjusted trial balance to prepare entries to close EMBG\'s temporary

Question

Use EMBG's adjusted trial balance to prepare entries to close EMBG's temporary accounts (using Retained Earnings), in journal entry form EMBG CORPORATION Adjusted Trial Balance For the Year Ending December 31, 2016 Debit Credit Cash Accounts receivable Equipment $ 44,000 28,000 376,000 ccumulated depreciation Notes payable Common stock Retained earnings Service fees earned Rent expense Salaries expense Depreciation expense Totals 72,000 60,000 130,000 62,000 326,000 44,000 116,000 42,0000 0 $650,000

Explanation / Answer

Revenues shows a credit balance, so close this temporary account we have debit it. All expenses shall be having debit balances. So to close them, we have to credit these balanceses. The difference between revenues and expenses is Net Income, hence added to retained earnings by giving a credit to it.

Debit Credit Service fees earned 326000 Salaries expenses 116000 Rent expense 44000 Depreciation expenses 42000 Retained earnings 124000

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