The accounts in the Adjusted Trial Balance (after any adjusting entries) at the
ID: 2534660 • Letter: T
Question
The accounts in the Adjusted Trial Balance (after any adjusting entries) at the end of the accounting period for Lord Fairfax Entertainment Co. are listed BELOW in alphabetical order. All accounts have normal balances.
Based on the ABOVE information and YOUR calculations, recommend preparing the four POST CLOSING journal entries using the account titles/descriptions: Fees Earned, Income Summary, Capital Stock, Dividends, Supply Expense, and Wage Expense. Remember, you will not be using some of the account balances at the top as they are permanent account and are not closed out.
Complete below only the third step to close out the Income Summary Account.
Q: Apr 30 Third step to close our the Income Summary Account is:
a. Debit income summary $2,500; Credit Capital Stock/Retained Earnings $2,500
b. Debit Income Summary $3,400, Credit Capital Stock /Retained Earnings $3,400
c. Debit Capital Stock/Retained Earnings $3,400; Credit Income Summary $3,400
d. Debit Capital Stock/ Retained Earnings $10,000; Credit Income Summary $10,000
Accounts Payable $1,000 Accounts Receivable 5,000 Capital Stock/Retained Earnings 10,000 Cash 7,500 Dividends paid 2,500 Fees Earned 5,000 Supplies (asset) 400 Supplies Expense 600 Wages Expense 1,000 Wages Payable 1,000Explanation / Answer
Answers
Accounts title
Debit
Credit
Fees Earned
$ 5,000.00
Income Summary
$ 5,000.00
(1st step: revenue accounts closed)
Income Summary
$ 1,600.00
Supplies expense
$ 600.00
Wages Expenses
$ 1,000.00
(2nd step: expense accounts closed)
Income Summary
$ 3,400.00
Capital Stock/Retained Earnings [5000 - 1600]
$ 3,400.00
(3rd step: Income summary balance closed)
Capital Stock/Retained earnings
$ 2,500.00
Dividends (paid)
$ 2,500.00
(4th step: Dividend account closed)
Accounts title
Debit
Credit
Fees Earned
$ 5,000.00
Income Summary
$ 5,000.00
(1st step: revenue accounts closed)
Income Summary
$ 1,600.00
Supplies expense
$ 600.00
Wages Expenses
$ 1,000.00
(2nd step: expense accounts closed)
Income Summary
$ 3,400.00
Capital Stock/Retained Earnings [5000 - 1600]
$ 3,400.00
(3rd step: Income summary balance closed)
Capital Stock/Retained earnings
$ 2,500.00
Dividends (paid)
$ 2,500.00
(4th step: Dividend account closed)
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.