SHERIDAN COMPANY Trial Balance August 31, 2017 Before Adjustment After Adjustmen
ID: 2343149 • Letter: S
Question
SHERIDAN COMPANY Trial Balance August 31, 2017 Before Adjustment After Adjustment Cr Dr $11,510 9,640 1,790 2,850 16,500 Cr $11,510 8,970 2,970 4,270 16,500 Cash Accounts Receivable Supplies Prepaid Insurance Equipment Accumulated Depreciation-Equipment Accounts Payable Salaries and Wages Payable Unearned Rent Revenue Common Stock Retained Earnings Dividends Service Revenue Rent Revenue Salaries and Wages Expense Supplies Expense Rent Expense Insurance Expense Depreciation Expense $3,713 5,270 0 1,930 15,770 5,720 $4,913 5,270 1,550 1,120 15,770 5,720 2,690 2,690 33,680 13,550 34,350 14,360 16,770 18,320 1,180 15,953 1,420 1,200 15,953 0 $79,633 $79,633 $83,053 $83,053 Prepare the closing entries for the temporary accounts at August 31. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)Explanation / Answer
Closing Entries
Date
Accounts and Explanations
Debit
Credit
31-Aug
Service Revenue
$34,350.00
Rent Revenue
$14,360.00
Income Summery
$48,710.00
(Revenue accounts closed)
31-Aug
Income Summery
$38,073.00
Salaries and wages expense
$18,320.00
Depreciation expense
$1,200.00
Supplies Expense
$1,180.00
Rent expense
$15,953.00
Insurance Expense
$1,420.00
(Expenses Accounts closed)
31-Aug
Income Summery
$10,637.00
Retained Earnings
$10,637.00
(Income summery transferred to Retained earnings)
31-Aug
Retained Earnings
$2,690.00
Dividends
$2,690.00
(To close Dividend account)
When revenue is more than expense then it means there is a profit. Profit is transferred to retained earnings account. In the given above question balance in income summery before transferring it to retained earnings account is the net income earned.
Dividends is paid out of retained earnings so dividend is transferred to retained earnings account.
Closing Entries
Date
Accounts and Explanations
Debit
Credit
31-Aug
Service Revenue
$34,350.00
Rent Revenue
$14,360.00
Income Summery
$48,710.00
(Revenue accounts closed)
31-Aug
Income Summery
$38,073.00
Salaries and wages expense
$18,320.00
Depreciation expense
$1,200.00
Supplies Expense
$1,180.00
Rent expense
$15,953.00
Insurance Expense
$1,420.00
(Expenses Accounts closed)
31-Aug
Income Summery
$10,637.00
Retained Earnings
$10,637.00
(Income summery transferred to Retained earnings)
31-Aug
Retained Earnings
$2,690.00
Dividends
$2,690.00
(To close Dividend account)
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