The adjusted trial balance of AltaAlta Corporation at December 31 shows that sal
ID: 2339007 • Letter: T
Question
The adjusted trial balance of
AltaAlta
Corporation at December 31 shows that sales revenue for the year was
$ 550 comma 000$550,000
and other revenue was
$ 49 comma 000$49,000.
Cost of goods sold for that same period was
$ 305 comma 000$305,000,
while other expenses totaled
$ 210 comma 000$210,000.
The corporation declared and paid dividends of
$ 20 comma 000$20,000
during the year. The balance of retained earnings before closing entries was
$ 460 comma 000$460,000.
Read the requirements
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.
1. Prepare the closing entries for revenues, expenses, and dividends for the year. (Record debits first, then credits. Exclude explanations from any journal entries.)
Begin by recording the entry to close out the revenue accounts.
Journal Entry
Date
Accounts
Debit
Credit
Dec
31
Close out the expense accounts.
Journal Entry
Date
Accounts
Debit
Credit
Dec
31
Close out the Dividends account.
Journal Entry
Date
Accounts
Debit
Credit
Dec
31
2. What was net income for the year?
Select the formula and enter the amounts to determine net income for the year.
-
=
Net Income
-
=
3. What is the ending balance of retained earnings after the closing entries are posted?
Select the formula and enter the amounts to determine the ending balance of retained earnings after the closing entries are posted.
Ending Retained
+
-
=
Earnings
+
-
=
Choose from any list or enter any number in the input fields and then continue to the next question.
Journal Entry
Date
Accounts
Debit
Credit
Dec
31
Explanation / Answer
Solution:
Part 1 – Journal Entry to close out the revenue, expense and dividend
Date
General Journal
Debit
Credit
Dec.31
Sales Revenue
$550,000
Other Revenue
$49,000
Income Summary
$599,000
(To close out the revenue accounts)
Dec.31
Income Summary
$515,000
Cost of Goods Sold
$305,000
Other Expenses
$210,000
(To close out the expenses account)
Dec.31
Retained Earnings
$20,000
Dividends
$20,000
(To close out the dividend account)
Part 2 – Net Income for the year
Revenue
-
Expenses
=
Net Income
$599,000
-
$515,000
=
$84,000
Part 3 – Ending balance of Retained Earnings
Beginning Retained Earnings
+
Net Income
-
Dividend Paid
=
Ending Retained Earnings
$460,000
+
$84,000
-
$20,000
=
$524,000
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Date
General Journal
Debit
Credit
Dec.31
Sales Revenue
$550,000
Other Revenue
$49,000
Income Summary
$599,000
(To close out the revenue accounts)
Dec.31
Income Summary
$515,000
Cost of Goods Sold
$305,000
Other Expenses
$210,000
(To close out the expenses account)
Dec.31
Retained Earnings
$20,000
Dividends
$20,000
(To close out the dividend account)
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