E4-22 Recording Closing Entries LO4-4 Green Valley Company prepared the followin
ID: 2572957 • Letter: E
Question
E4-22 Recording Closing Entries LO4-4 Green Valley Company prepared the following trial balance at the end of its first year of operations ending December 31. To simplify the case, the amounts given are in thousands of dollars. UNADJUSTED Account Titles Debit Credit Cash 20 Accounts receivable 13 Prepaid insurance 8 Machinery 85 Accumulated depreciation Accounts payable 11 Wages payable Income taxes payable Common stock (4,000 shares) 4 Additional paid-in capital 67 Retained earnings 6 Revenues (not detailed) 82 Expenses (not detailed) 32 Totals 164 164 Other data not yet recorded at December 31 include: Insurance expired during the current year, $7. Wages payable, $4. Depreciation expense for the current year, $9. Income tax expense, $11. Required: 2. Using the adjusted balances, give the closing entry for the current year.
Explanation / Answer
Unadjusted trial balance
Explanation
Debit
Credit
cash
20
Accounts receivables
13
Prepaid insurance
8
Machinery
85
accumulated depreciation
A/P
11
wages payable
income tax payable
common stock
4
additional paid in capital
67
retained earning
6
revenue
82
expenses
32
total
164
164
Gerneral Journal
Date
Explanation
Debit
credit
Insurance expense
7
Prepaid insurance
7
wage expenses
4
wages payable
4
Depreciation expense
9
accumulated depreciation
9
Income tax expense
11
income tax payable
11
adjusted trial balance
Explanation
Debit
Credit
cash
20
Accounts receivables
13
Prepaid insurance
1
Insurance expense
7
Machinary
85
Depreciation expense
9
aacumulated depreciation
9
A/P
11
wages expense
4
wages payable
4
income tax expense
11
income tax payable
11
common stock
4
additional paid in capital
67
retained earning
6
revenue
82
expenses
32
total
188
188
Closing Journal Entries
Date
Explanation
Debit
credit
revenue
82
income summary
82
income summary
63
Insurance expense
7
Depreciation expense
9
wages expense
4
income tax expense
11
expenses
32
Income summary
19
retained earning
19
Unadjusted trial balance
Explanation
Debit
Credit
cash
20
Accounts receivables
13
Prepaid insurance
8
Machinery
85
accumulated depreciation
A/P
11
wages payable
income tax payable
common stock
4
additional paid in capital
67
retained earning
6
revenue
82
expenses
32
total
164
164
Gerneral Journal
Date
Explanation
Debit
credit
Insurance expense
7
Prepaid insurance
7
wage expenses
4
wages payable
4
Depreciation expense
9
accumulated depreciation
9
Income tax expense
11
income tax payable
11
adjusted trial balance
Explanation
Debit
Credit
cash
20
Accounts receivables
13
Prepaid insurance
1
Insurance expense
7
Machinary
85
Depreciation expense
9
aacumulated depreciation
9
A/P
11
wages expense
4
wages payable
4
income tax expense
11
income tax payable
11
common stock
4
additional paid in capital
67
retained earning
6
revenue
82
expenses
32
total
188
188
Closing Journal Entries
Date
Explanation
Debit
credit
revenue
82
income summary
82
income summary
63
Insurance expense
7
Depreciation expense
9
wages expense
4
income tax expense
11
expenses
32
Income summary
19
retained earning
19
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