On December 31, 2014, Purrfect Pets had retained earnings of $267,800 before mak

Question

On December 31, 2014, Purrfect Pets had retained earnings of $267,800 before making its closing entries. During 2014, the company had service revenue of $168,100 and other revenue of $81,300. The company used supplies (mainly cat food and litter) during the year which cost $87,900. Administrative expenses were $16,400 and wages (paid in cash) were $18,300. Taxes were $13,700 and dividends declared and paid totaled $6,000. Prepare T-accounts for the income statement accounts, dividends declared, and retained earnings at the end of the year before closing. Then, enter the closing journal entries in the T-accounts and compute the ending balances of the T-accounts.

Explanation / Answer

Answer:

Income statement Service revenue 168100 Other revenue 81300 Total revenue 249400 Less: Supplies cost 87900 Administrative exp 16400 Wages 18300 Taxes 13700 Net income 113100

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