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Recording Adjusting and Closing Entries for a Corporation
Chapter 16
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Chapter 15 Review Last Chapter we spent the time creating a worksheet
We spent time doing adjustments We spent time Creating Financial Statements Income Statement Statement of Owner’s Equity Balance Sheet
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This chapter we finish up any leftover things to work on.
We have to record the adjusting entries We have to record closing entries.
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Recording Adjusting Entries
ACCOUNT TITLE TRIAL BALANCE ADJUSTMENTS DEBIT CREDIT CASH PETTY CASH 300 ACCOUNTS REC ALLOW FOR UNC ACCTS 127.52 (E) 1245 MERCH INVENTORY 140480 (D)15840 SUPP - OFFICE 3480 (A) 2730 SUPP - STORE 3944 (B)2910 PREPAID INSURANCE 5800 © 3170 INCOME SUMMARY SUPP EXP -OFFICE SUPP EXP - STORE (B) 2910 UNCOLL ACCT EXP UTILITIES EXP 3820 FEDERAL INC TAX EXP 18000 (H) Key behind this is looking at the worksheet and record each on as you work down the page. GENERAL JOURNAL DATE ACCOUNT TITLE DOC NO POST REF DEBIT CREDIT ADJUSTING ENTRIES DEC 31 SUPPLIES EXP – OFFICE 2730 SUPPLIES – OFFICE SUPPLIES EXP – STORE 2910 SUPPLIES - STORE 2910
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LETS DO THE OWN YOUR OWN ON PAGE 486
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CLOSING ENTRIES
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CLOSING STEPS We have done this once before.
ACCOUNT TITLE TRIAL BALANCE INCOME STATEMENT DEBIT CREDIT SALES 495120 SALES DISCOUNT 258.48 SALES RETURN AND ALL PURCHASES 209960 PURCHASE DISC PURCH RET AND ALLOWAN We have done this once before. Look at the income statement column. Close all of the accounts that have a credit balance to the income summary account. GENERAL JOURNAL DATE ACCOUNT TITLE DOC NO POST REF DEBIT CREDIT CLOSING ENTRIES DEC 31 SALES 495120 PURCH DISCOUNT PURCH RETURN AND ALLOW INCOME SUMMARY
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CLOSING ENTRIES We have done this once before.
ACCOUNT TITLE TRIAL BALANCE INCOME STATEMENT DEBIT CREDIT SALES 495120 SALES DISCOUNT 258.48 SALES RETURN AND ALL PURCHASES 209960 PURCHASE DISC PURCH RET AND ALLOWAN ADVERTISING EXPENSE 3600 CASH SHOERT AND OVER 19.25 CREDIT CARD EXPENSE 3385 ALL OF THE OTHER EXPENSES UTILITIES EXPENSE 3820 FEDERAL INCOME TAX EXPENSE 18000 We have done this once before. Look at the income statement column. Close all of the accounts that have a credit balance to the income summary account. Look at the income statement column. Close all of the accounts with a debit balance to the income summary account GENERAL JOURNAL DATE ACCOUNT TITLE DOC NO POST REF DEBIT CREDIT CLOSING ENTRIES DEC 31 SALES 495120 PURCH DISCOUNT PURCH RETURN AND ALLOW INCOME SUMMARY SALES DISCOUNT 258.48 SALES RET AND ALLOW PURCHASES 209960 ADVERTISING EXP 3600 CASH SHORT AND OVER 19.25 CREDIT CARD FEE EXPENSE 3385 DEP EXP - OFFICE EQUIP 6540 DEP EXP - STORE EQUIP 5250 UTILITIES EXPENSE 3820 FEDERAL INCOME TAX EXP
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We have done this once before.
GENERAL JOURNAL DATE ACCOUNT TITLE DOC NO POST REF DEBIT CREDIT CLOSING ENTRIES DEC 31 SALES 495120 PURCH DISCOUNT PURCH RETURN AND ALLOW INCOME SUMMARY SALES DISCOUNT 258.48 SALES RET AND ALLOW PURCHASES 209960 ADVERTISING EXP 3600 CASH SHORT AND OVER 19.25 CREDIT CARD FEE EXPENSE 3385 DEP EXP - OFFICE EQUIP 6540 DEP EXP - STORE EQUIP 5250 UTILITIES EXPENSE 3820 FEDERAL INCOME TAX EXP RETAINED EARNINGS GENERAL JOURNAL DATE ACCOUNT TITLE DOC NO POST REF DEBIT CREDIT CLOSING ENTRIES DEC 31 SALES 495120 PURCH DISCOUNT PURCH RETURN AND ALLOW INCOME SUMMARY SALES DISCOUNT 258.48 SALES RET AND ALLOW PURCHASES 209960 ADVERTISING EXP 3600 CASH SHORT AND OVER 19.25 CREDIT CARD FEE EXPENSE 3385 DEP EXP - OFFICE EQUIP 6540 DEP EXP - STORE EQUIP 5250 UTILITIES EXPENSE 3820 FEDERAL INCOME TAX EXP We have done this once before. Look at the income statement column. Close all of the accounts that have a credit balance to the income summary account. Look at the income statement column. Close all of the accounts with a debit balance to the income summary account Close the income summary account to the Retained Earnings account Income Summary Net Loss Net Income
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ACCOUNT TITLE TRIAL BALANCE ADJUSTMENTS DEBIT CREDIT CASH PETTY CASH 300 ACCOUNTS REC ALLOW FOR UNC ACCTS 127.52 (E) 1245 MERCH INVENTORY 140480 (D)15840 SUPP - OFFICE 3480 (A) 2730 SUPP - STORE 3944 (B)2910 PREPAID INSURANCE 5800 © 3170 DIVIDENDS 20000 INCOME SUMMARY SUPP EXP -OFFICE SUPP EXP - STORE (B) 2910 UNCOLL ACCT EXP UTILITIES EXP 3820 FEDERAL INC TAX EXP 18000 (H) CLOSING ENTRIES Look at the income statement column. Close all accounts that have a credit balance to the income summary account Look at the income statement column. Close all accounts that have a debit balance to the income summary account Close the income summary account to the retained earnings account. Close dividends to the retained earnings account. GENERAL JOURNAL DATE ACCOUNT TITLE DOC NO POST REF DEBIT CREDIT CLOSING ENTRIES DEC 31 SALES 495120 PURCH DISCOUNT PURCH RETURN AND ALLOW INCOME SUMMARY SALES DISCOUNT 258.48 SALES RET AND ALLOW PURCHASES 209960 ADVERTISING EXP 3600 CASH SHORT AND OVER 19.25 CREDIT CARD FEE EXPENSE 3385 DEP EXP - OFFICE EQUIP 6540 DEP EXP - STORE EQUIP 5250 UTILITIES EXPENSE 3820 FEDERAL INCOME TAX EXP RETAINED EARNINGS 20000 DIVIDENDS
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