Closing Entries Closing Entries are journal entries made to close the balances in the temporary...
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Closing Entries Closing Entries are journal entries made to close the balances in the temporary capital accounts and to transfer the net income or net loss for the period to the capital account. ournalizing Closing Entries the accounting cycle is almost complete. 1 Collect and verify source documents 2 Analyze each transaction 3 Journalize each transaction 4 Post to the ledger 5 Prepare a trial balance 6 Prepare a worksheet 7 Prepare financial statements 8 Journalize and post closing entries 9 Prepare a post-closing trial balance 1 Collect and verify source documents 2 Analyze each transaction 3 Journalize each transaction 4 Post to the ledger 5 Prepare a trial balance 6 Prepare a worksheet 7 Prepare financial statements 8 Journalize and post closing entries
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Transcript of Closing Entries Closing Entries are journal entries made to close the balances in the temporary...
Closing EntriesClosing Entries are journal entries made to close the balances in the temporary capital accounts and to transfer the net income or net loss for the period to the capital account.
After journalizing Closing Entries the accounting cycle is almost complete.
1Collect
and verifysource
documents
2Analyze
eachtransaction
3Journalize
eachtransaction
4Post to the
ledger
5Prepare a
trialbalance
6Prepare aworksheet
7Preparefinancial
statements
8Journalizeand postclosingentries
9Prepare a
post-closingtrial
balance
1Collect
and verifysource
documents
2Analyze
eachtransaction
3Journalize
eachtransaction
4Post to the
ledger
5Prepare a
trialbalance
6Prepare aworksheet
7Preparefinancial
statements
8Journalizeand postclosingentries
The Purpose of Closing Entries
Revenue:
Delivery Revenue 2,650
Expenses:
Advertising Expense 75
Maintenance Expense 600
Rent Expense 700
Utilities Expense 125
Total Expenses 1,500
Net Income 1,150
Roadrunner Delivery Service
I ncome Statement
For the Month Ended, October 31, 2006
Beginning Capital, October 1, 2006 --------
Add: I nvestments by Owner 25,400
Net I ncome 1,150
Total I ncrease in Capital 26,550
Subtotal 26,550
Less: Withdrawals 500
Ending Capital, October 31, 2006 26,050
Roadrunner Delivery Service
Statement of Changes in Owner's Equity
For the Month Ended, October 31, 2006
Cash in Bank 21,125
Accounts Receivable - City News 1,450
Accounts Receivable - Green Company --------
Computer Equipment 3,000
Offi ce Equipment 200
Delivery Equipment 12,000
Total Assets 37,775
Accounts Payable - Beacon Advertising 75
Accounts Payable - North Shore Auto 11,650
Total Liabilities 11,725
Maria Sanchez, Capital 26,050
Total Liabilities & Owner's Equity 37,775
Owner's Equity
Liabilities
Roadrunner Delivery Service
Balance Sheet
October 31, 2006
Assets
The net income appears on the income statement
Revenue:
Delivery Revenue 2,650
Expenses:
Advertising Expense 75
Maintenance Expense 600
Rent Expense 700
Utilities Expense 125
Total Expenses 1,500
Net Income 1,150
Roadrunner Delivery Service
I ncome Statement
For the Month Ended, October 31, 2006Net income is included in ending capital balance.
Beginning Capital, October 1, 2006 --------
Add: I nvestments by Owner 25,400
Net Income 1,150
Total I ncrease in Capital 26,550
Subtotal 26,550
Less: Withdrawals 500
Ending Capital, October 31, 2006 26,050
Roadrunner Delivery Service
Statement of Changes in Owner's Equity
For the Month Ended, October 31, 2006
Ending capital balance goes on the balance sheet.
Cash in Bank 21,125
Accounts Receivable - City News 1,450
Accounts Receivable - Green Company --------
Computer Equipment 3,000
Offi ce Equipment 200
Delivery Equipment 12,000
Total Assets 37,775
Accounts Payable - Beacon Advertising 75
Accounts Payable - North Shore Auto 11,650
Total Liabilities 11,725
Maria Sanchez, Capital 26,050
Total Liabilities & Owner's Equity 37,775
Owner's Equity
Liabilities
Roadrunner Delivery Service
Balance Sheet
October 31, 2006
Assets
This capital balance does not match the capital balance in the general ledger.
The Income Summary AccountIt’s about time we started using this
account.
How do we use the income summary
account?
Income Summary is used to accumulate and summarize the revenue and the expenses for the accounting period.Income Summary is a simple version of the income statement for the period.
Revenue goes in as a credit, and expenses go in as debits. The balance of Income Summary is the net income or net loss for the accounting period.
Income Summary
Debit Credit
RevenueExpenses
Credit balanceMeans
Net Income
Debit balanceMeans
Net Loss
Quick Summary ofClosing Entries
• The balance of the revenue account is transferred to Income Summary
• The expense balances are transferred to Income Summary
• The balance of Income Summary is transferred to the Capital account
• The balance of withdrawals is transferred to the Capital account
Revenue Closing EntrySince a revenue account has a credit balance, in order to make the balance zero, the account must be debited.
Since for every debit there must be a credit of equal value, Income Summary is credited.
Remember to always keep balance Daniel Son.
Page: 3
POST REF DEBI T CREDI T
1
2
3
4
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
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POST REF DEBI T CREDI T
1 2006
2 OCT 31
3
4
DESCRI PTI ON
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DATE
Closing Entries
Page: 3
POST REF DEBI T CREDI T
1 2006
2 OCT 31 Delivery Revenue 2,650
3
4
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
Page: 3
POST REF DEBI T CREDI T
1 2006
2 OCT 31 Delivery Revenue 2,650
3 Income Summary 2,650
4
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
Refer to the worksheet on page 192 of your textbook to follow the
examples.
Expense Closing EntrySince an expense account has a debit balance, in order to make the balance zero, the account must be credited.
Since for every credit there must be a debit of equal value, Income Summary is debited.
Debit Income Summary for the total of all expenses, and credit each individual expense
account.
Page: 3
POST REF DEBI T CREDI T
4 31 Income Summary 1,500
5
6
7
8
DESCRI PTI ON
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DATE
Page: 3
POST REF DEBI T CREDI T
4 31 Income Summary 1,500
5 Advertising Expense 75
6 Maintenance Expense 600
7 Rent Expense 700
8 Utilities Expense 125
DESCRI PTI ON
GENERAL J OURNAL
DATE
Income Summary Closing Entry
Let’s take a look at what the
income summary account looks
like.
Income Summary
2,6501,500
1,150 Bal
Since income summary has a credit balance, in order to make the balance zero, the account must be debited.
Since for every debit there must be a credit of equal value, capital is credited.
A credit balance represents a net income.
Page: 3
POST REF DEBI T CREDI T
9 31 Income Summary 1,150
10
DESCRI PTI ON
GENERAL J OURNAL
DATE
Page: 3
POST REF DEBI T CREDI T
9 31 Income Summary 1,150
10 Maria Sanchez, Capital 1,150
DESCRI PTI ON
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DATE
A credit to capital increases the net worth of the company.
Withdrawals Closing Entry
Since withdrawals has a debit balance, in order to make the balance zero, the account must be credited.
Since for every credit there must be a debit of equal value, capital is debited.
Page: 3
POST REF DEBI T CREDI T
11 31 Maria Sanchez, Capital 500
12
DESCRI PTI ON
GENERAL J OURNAL
DATE
Page: 3
POST REF DEBI T CREDI T
11 31 Maria Sanchez, Capital 500
12 Maria Sanchez, Withdrawals 500
13
DESCRI PTI ON
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DATE
When the closing entries are complete, all the temporary accounts have zero balances, and the capital account has the balance that was calculated as the ending balance on the Statement of Changes in Owner’s Equity.
Completed Closing Entries
Page: 3
POST REF DEBI T CREDI T
1 2006
2 OCT 31 Delivery Revenue 2,650
3 Income Summary 2,650
4 31 Income Summary 1,500
5 Advertising Expense 75
6 Maintenance Expense 600
7 Rent Expense 700
8 Utilities Expense 125
9 31 Income Summary 1,150
10 Maria Sanchez, Capital 1,150
11 31 Maria Sanchez, Capital 500
12 Maria Sanchez, Withdrawals 500
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
1) Close Revenue Accounts
Page: 3
POST REF DEBI T CREDI T
1 2006
2 OCT 31 Delivery Revenue 2,650
3 Income Summary 2,650
4 31 Income Summary 1,500
5 Advertising Expense 75
6 Maintenance Expense 600
7 Rent Expense 700
8 Utilities Expense 125
9 31 Income Summary 1,150
10 Maria Sanchez, Capital 1,150
11 31 Maria Sanchez, Capital 500
12 Maria Sanchez, Withdrawals 500
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
2) Close Expense Accounts
Page: 3
POST REF DEBI T CREDI T
1 2006
2 OCT 31 Delivery Revenue 2,650
3 Income Summary 2,650
4 31 Income Summary 1,500
5 Advertising Expense 75
6 Maintenance Expense 600
7 Rent Expense 700
8 Utilities Expense 125
9 31 Income Summary 1,150
10 Maria Sanchez, Capital 1,150
11 31 Maria Sanchez, Capital 500
12 Maria Sanchez, Withdrawals 500
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
3) Close Income Summary Account
Page: 3
POST REF DEBI T CREDI T
1 2006
2 OCT 31 Delivery Revenue 2,650
3 Income Summary 2,650
4 31 Income Summary 1,500
5 Advertising Expense 75
6 Maintenance Expense 600
7 Rent Expense 700
8 Utilities Expense 125
9 31 Income Summary 1,150
10 Maria Sanchez, Capital 1,150
11 31 Maria Sanchez, Capital 500
12 Maria Sanchez, Withdrawals 500
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
4) Close Withdrawal Account
Page: 3
POST REF DEBI T CREDI T
1 2006
2 OCT 31 Delivery Revenue 2,650
3 Income Summary 2,650
4 31 Income Summary 1,500
5 Advertising Expense 75
6 Maintenance Expense 600
7 Rent Expense 700
8 Utilities Expense 125
9 31 Income Summary 1,150
10 Maria Sanchez, Capital 1,150
11 31 Maria Sanchez, Capital 500
12 Maria Sanchez, Withdrawals 500
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
Posting the Revenue Closing EntryPage: 3
POST REF DEBI T CREDI T
2 OCT 31 Delivery Revenue 401 2,650
3 Income Summary 303 2,650
DESCRI PTI ON
GENERAL J OURNAL
DATE
ACCOUNT Delivery Revenue ACCOUNT NO. 401
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 15 G1 1,200 1,200
20 G1 1,450 2,650
DATE DESCRI PTI ON
BALANCE
ACCOUNT Income Summary ACCOUNT NO. 303
POST
REF DEBI T CREDI T DEBI T CREDI TDATE DESCRI PTI ON
BALANCE
ACCOUNT Delivery Revenue ACCOUNT NO. 401
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 15 G1 1,200 1,200
20 G1 1,450 2,650
31 Closing Entry G3 2,650 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Income Summary ACCOUNT NO. 303
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 Closing Entry G3 2,650 2,650
DATE DESCRI PTI ON
BALANCE
Posting the Expense Closing Entry (1)Page: 3
POST REF DEBI T CREDI T
4 31 Income Summary 303 1,500
5 Advertising Expense 501 75
6 Maintenance Expense 505 600
7 Rent Expense 510 700
8 Utilities Expense 515 125
DESCRI PTI ON
GENERAL J OURNAL
DATE
ACCOUNT Income Summary ACCOUNT NO. 303
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 Closing Entry G3 2,650 2,650
31 Closing Entry G3 1,500 1,150
DATE DESCRI PTI ON
BALANCE
ACCOUNT Advertising Expense ACCOUNT NO. 501
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 18 G1 75 75
DATE DESCRI PTI ON
BALANCE
ACCOUNT Advertising Expense ACCOUNT NO. 501
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 18 G1 75 75
31 Closing Entry G3 75 -
DATE DESCRI PTI ON
BALANCE
Posting the Expense Closing Entry (2)ACCOUNT Maintenance Expense ACCOUNT NO. 505
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 29 G2 600 600
DATE DESCRI PTI ON
BALANCE
ACCOUNT Rent Expense ACCOUNT NO. 510
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 16 G1 700 700
DATE DESCRI PTI ON
BALANCE
ACCOUNT Utilities Expense ACCOUNT NO. 515
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 28 G2 125 125
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maintenance Expense ACCOUNT NO. 505
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 29 G2 600 600
31 Closing Entry G3 600 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Rent Expense ACCOUNT NO. 510
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 16 G1 700 700
31 Closing Entry G3 700 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Utilities Expense ACCOUNT NO. 515
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 28 G2 125 125
31 Closing Entry G3 125 -
DATE DESCRI PTI ON
BALANCE
Posting the Income Summary Closing Entry Page: 3
POST REF DEBI T CREDI T
9 31 Income Summary 303 1,150
10 Maria Sanchez, Capital 301 1,150
DESCRI PTI ON
GENERAL J OURNAL
DATE
ACCOUNT Income Summary ACCOUNT NO. 303
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 Closing Entry G3 2,650 2,650
31 Closing Entry G3 1,500 1,150
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Capital ACCOUNT NO. 301
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 1 G1 25,000 25,000
2 G1 400 25,400
DATE DESCRI PTI ON
BALANCE
ACCOUNT Income Summary ACCOUNT NO. 303
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 Closing Entry G3 2,650 2,650
31 Closing Entry G3 1,500 1,150
31 Closing Entry G3 1,150 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Capital ACCOUNT NO. 301
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 1 G1 25,000 25,000
2 G1 400 25,400
31 Closing Entry G3 1,150 26,550
DATE DESCRI PTI ON
BALANCE
Posting the Withdrawal Closing EntryPage: 3
POST REF DEBI T CREDI T
11 31 Maria Sanchez, Capital 500
12 Maria Sanchez, Withdrawals 500
DESCRI PTI ON
GENERAL J OURNAL
DATE
ACCOUNT Maria Sanchez, Capital ACCOUNT NO. 301
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 1 G1 25,000 25,000
2 G1 400 25,400
31 Closing Entry G3 1,150 26,550
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Withdrawals ACCOUNT NO. 302
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 G2 500 500
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Capital ACCOUNT NO. 301
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 1 G1 25,000 25,000
2 G1 400 25,400
31 Closing Entry G3 1,150 26,550
31 Closing Entry G3 500 26,050
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Withdrawals ACCOUNT NO. 302
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 G2 500 500
31 Closing Entry G3 500 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Cash in Bank ACCOUNT NO. 101
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 1 G1 25,000 25,000
4 G1 3,000 22,000
12 G1 350 21,650
14 G1 200 21,850
15 G1 1,200 23,050
16 G1 700 22,350
28 G2 125 22,225
29 G2 600 21,625
31 G2 500 21,125
DATE DESCRI PTI ON
BALANCE
ACCOUNT Accounts Receivable - City News ACCOUNT NO. 105
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 20 G1 1,450 1,450
DATE DESCRI PTI ON
BALANCE
ACCOUNT Accounts Receivable - Green Comapany ACCOUNT NO. 110
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 11 G1 200 200
14 G1 200 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Computer Equipment ACCOUNT NO. 115
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 4 G1 3,000 3,000
DATE DESCRI PTI ON
BALANCE
ACCOUNT Offi ce Equipment ACCOUNT NO. 120
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 2 G1 400 400
4 G1 200 200
DATE DESCRI PTI ON
BALANCE
ACCOUNT Delevery Equipment ACCOUNT NO. 125
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 9 G1 12,000 12,000
DATE DESCRI PTI ON
BALANCE
ACCOUNT Accounts Payable - Beacon Advertising ACCOUNT NO. 201
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 18 G1 75 75
DATE DESCRI PTI ON
BALANCE
ACCOUNT Accounts Payable - North Shore Auto ACCOUNT NO. 205
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 9 G1 12,000 12,000
12 G1 350 11,650
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Capital ACCOUNT NO. 301
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 1 G1 25,000 25,000
2 G1 400 25,400
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Withdrawals ACCOUNT NO. 302
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 G2 500 500
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Capital ACCOUNT NO. 301
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 1 G1 25,000 25,000
2 G1 400 25,400
31 Closing Entry G3 1,150 26,550
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Capital ACCOUNT NO. 301
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 1 G1 25,000 25,000
2 G1 400 25,400
31 Closing Entry G3 1,150 26,550
31 Closing Entry G3 500 26,050
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maria Sanchez, Withdrawals ACCOUNT NO. 302
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 G2 500 500
31 Closing Entry G3 500 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Income Summary ACCOUNT NO. 303
POST
REF DEBI T CREDI T DEBI T CREDI TDATE DESCRI PTI ON
BALANCE
ACCOUNT Delivery Revenue ACCOUNT NO. 401
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 15 G1 1,200 1,200
20 G1 1,450 2,650
DATE DESCRI PTI ON
BALANCE
ACCOUNT Delivery Revenue ACCOUNT NO. 401
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 15 G1 1,200 1,200
20 G1 1,450 2,650
31 Closing Entry G3 2,650 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Income Summary ACCOUNT NO. 303
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 Closing Entry G3 2,650 2,650
DATE DESCRI PTI ON
BALANCE
ACCOUNT Income Summary ACCOUNT NO. 303
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 Closing Entry G3 2,650 2,650
31 Closing Entry G3 1,500 1,150
DATE DESCRI PTI ON
BALANCE
ACCOUNT Income Summary ACCOUNT NO. 303
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 31 Closing Entry G3 2,650 2,650
31 Closing Entry G3 1,500 1,150
31 Closing Entry G3 1,150 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Advertising Expense ACCOUNT NO. 501
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 18 G1 75 75
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maintenance Expense ACCOUNT NO. 505
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 29 G2 600 600
DATE DESCRI PTI ON
BALANCE
ACCOUNT Advertising Expense ACCOUNT NO. 501
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 18 G1 75 75
31 Closing Entry G3 75 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Maintenance Expense ACCOUNT NO. 505
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 29 G2 600 600
31 Closing Entry G3 600 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Utilities Expense ACCOUNT NO. 515
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 28 G2 125 125
DATE DESCRI PTI ON
BALANCE
ACCOUNT Rent Expense ACCOUNT NO. 510
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 16 G1 700 700
DATE DESCRI PTI ON
BALANCE
ACCOUNT Rent Expense ACCOUNT NO. 510
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 16 G1 700 700
31 Closing Entry G3 700 -
DATE DESCRI PTI ON
BALANCE
ACCOUNT Utilities Expense ACCOUNT NO. 515
POST
REF DEBI T CREDI T DEBI T CREDI T
2006
OCT 28 G2 125 125
31 Closing Entry G3 125 -
DATE DESCRI PTI ON
BALANCE
101 Cash in Bank 21,125
105 Accounts Receivable - City News 1,450
110 Accounts Receivable - Green Company ------
115 Computer Equipment 3,000
120 Offi ce Equipment 200
125 Delivery Equipment 12,000
201 Accounts Payable - Beacon Advertising 75
205 Accounts Payable - North Shore Auto 11,650
301 Maria Sanchez, Capital 26,050
Totals 37,775 37,775
Roadrunner Delivery Service
Post-Closing Trial Balance
October 31, 2006
Problem 10-4Page: 3
POST REF DEBI T CREDI T
1 2006
2 Dec
3
4
5
6
7
8
9
10
11
12
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
1) Close Revenue Accounts
Page: 3
POST REF DEBI T CREDI T
1 2006
2 DEC 31 Equipment Rental Revenue 14,965
3 Income Summary 14,965
4
5
6
7
8
9
10
11
12
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
2) Close Expense Accounts
Page: 3
POST REF DEBI T CREDI T
1 2006
2 DEC 31 Delivery Revenue 14,965
3 Income Summary 14,965
4 31 Income Summary 5,290
5 Advertising Expense 1,500
6 Maintenance Expense 1,560
7 Rent Expense 1,000
8 Utilities Expense 1,230
9
10
11
12
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
3) Close Income Summary Account
Page: 3
POST REF DEBI T CREDI T
1 2006
2 DEC 31 Delivery Revenue 14,965
3 Income Summary 14,965
4 31 Income Summary 5,290
5 Advertising Expense 1,500
6 Maintenance Expense 1,560
7 Rent Expense 1,000
8 Utilities Expense 1,230
9 31 Income Summary 9,675
10 Ronald Hicks, Capital 9,675
11
12
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
4) Close Withdrawal Account
Page: 3
POST REF DEBI T CREDI T
1 2006
2 DEC 31 Delivery Revenue 14,965
3 Income Summary 14,965
4 31 Income Summary 5,290
5 Advertising Expense 1,500
6 Maintenance Expense 1,560
7 Rent Expense 1,000
8 Utilities Expense 1,230
9 31 Income Summary 9,675
10 Ronald Hicks, Capital 9,675
11 31 Ronald Hicks, Capital 2,350
12 Ronald Hicks, Withdrawals 2,350
DESCRI PTI ON
GENERAL J OURNAL
DATE
Closing Entries
Cash in Bank 8,000
Accounts Receivable - Linda Brown 875
Accounts Receivable - Valley Auto 5,050
Offi ce Equipment 6,000
Offi ce Furniture 9,000
Car Wash Equipment 65,000
Accounts Payable - Allen Vacuum Systems 41,000
O'Brian's Offi ce SupplyNorth Shore Auto 2,500
Regina Delgado, Capital 50,425
Totals 93,925 93,925
Hot Suds Car Wash
Post-Closing Trial Balance
December 31, 2006
