Rae Services Inc provides healthcare diagnostics for patient

Rae Services, Inc. provides healthcare diagnostics for patients with autoimmune diseases. At the end of their first year of operations, Rae Services account balances are shown in the adjusted trial balance shown below Services, Inc. Adjusted Trial Balance December 31, 2012 Cash Accounts receivable Supplies 172,500 139,000 4,500 2,400 85,500 Prepaid insurance Equipment Accumulated depreciation--Equipment Accounts payable 3,600 68,000 245,000 120,000 Common stock Retained earnings Dividends Service revenue Advertising expense Depreciation expense-Equipment Insurance expense 73,000 225,226 2,550 3,600 1,000 9,900 163,000 1,560 3,316 Rent expense Salaries expense Supplies expense Utilities expense 661,826 661,826

Solution

Rae Services Inc. Closing journal entries for the year ending December 31, 2012 Date Account title Debit Credit Dec.31, 2012 Service Revenue 225226 Advertisement 2550 Depreciation Expense - Euipment 3600 Insurance Expense 1000 Rent Expense 9900 Salaries Expense 163000 Supplies Expense 1560 Utilities expense 3316 Income summary 40300 (Entry to close the income and expense accounts) Income Summary 40300 Retained Earnings 40300 (Entry to close income summary to retained earnings) Retained Earnings 73000 Dividends 73000 (Entry to close dividends to retained earnings)