cpor E420 Preparing closing entries from an adjusted trial b

cpor E4-20 Preparing closing entries from an adjusted trial balance The adjusted trial balance of Smith Sign Company follows SMITH SIGN COMPANY Adjusted Trial Balance January 31, 2016 Balance Debit 15,300 ,800 1,000 51,000 Credit Account Title Cash Office Supplies Prepaid Rent Equipment Accumulated Depreciation-Equipment Accounts Payable Salaries Payable Unearned Revenue Notes Payable (long-term) Smith, Capital Smith, Withdrawals Service Revenue Salaries Expense Rent Expense Depreciation Expense-Equipment Supplies Expense Utilities Expense Total 6,600 4.300 300 4,500 4,900 38,500 1,000 17,600 3,800 1,500 400 200 70000 $76,700 $76,700 Requirements 1. Assume Smith Sign Company has a January 31 year-end. Journalize Smiths entries at January 31. 2. How much net income or net loss did Smith earn for the year ended January How can you tell?

Solution

Closing entries

date

explanation

Debit

credit

service revenue

17600

income summary

17600

income summary

6600

salary expense

3800

rent expense

1500

Depreciation expense

400

supplies expense

200

Utilities expense

700

income summary

11000

retained earnings

11000

Smith earned a net profit of 11000 in the current year. This figure can be traced from the portion of the income transferred to retained earning

	Closing entries
date	explanation	Debit	credit
	service revenue	17600
	income summary		17600
	income summary	6600
	salary expense		3800
	rent expense		1500
	Depreciation expense		400
	supplies expense		200
	Utilities expense		700
	income summary	11000
	retained earnings		11000
	Smith earned a net profit of 11000 in the current year. This figure can be traced from the portion of the income transferred to retained earning