1. Chapter 17 Recording Adjusting and Closing Entries for a Partnership

2. Adjusting Entries We adjust accounts that we do not change over a period of time. We adjust accounts that we do not change over a period of time. We bring those accounts up to date or “Adjust” them so that they are correct at the end of the year. We bring those accounts up to date or “Adjust” them so that they are correct at the end of the year.

3. Account TitleTrial BalanceAdjustments DebitCreditDebitCredit Merchandise Inventory270480 (a)15840 Supplies - Office6480 (b)4730 Supplies - Store6944 (c)3910 Prepaid Insurance5800 (d)3170 Income Summary (a)15840 Insurance Expense (d)3170 Supplies Expense - Office (b)4730 Supplies Expense - Store (c)3910 Worksheet General JournalPage 1 Date Account TitleDoc NoPost RefDebitCredit Adjusting Entries Dec31Income Summary 15840 Merchandise Inventory 15840 31Supplies Expense - Office 4730 Supplies - Office 4730 31Supplies Expense - Store 3910 Supplies - Store 3910 31Insurance Expense 3170 Prepaid Insurance 3170

4. Closing Entries We have done this once before. We have done this once before. Here are the steps that we use Here are the steps that we use Close all of the accounts in the Credit column of the income statement column. Close all of the accounts in the Credit column of the income statement column.

5. Please look at page 400 in text book General JournalPage 2 Date Account TitleDoc NoPost RefDebitCredit Closing Entries Dec31Sales 423120 Income Summary 423120 Close all credit balance accounts in the income statement column.

6. Closing Entries We have done this once before. We have done this once before. Here are the steps that we use Here are the steps that we use Close all of the accounts in the Credit column of the income statement column. Close all of the accounts in the Credit column of the income statement column. Close all of the accounts in the Debit column of the income statement column. Close all of the accounts in the Debit column of the income statement column.

7. General JournalPage 2 Date Account TitleDoc NoPost RefDebitCredit Closing Entries Dec31Sales 423120 Income Summary 423120 Dec31Income Summary 337664 Purchases 189960 Advertising Expense 6600 Credit Card Expense 3385 Insurance Expense 3170 Miscellaneous Expense 2584.15 Payroll Taxes Expense 9105 Rent Expense 21000 Salary Expense 89400 Supplies Expense - Office 4730 Supplies Expense - Store 3910 Utilities Expense 3820 Close all of the accounts in the Debit column of the income statement column. Close all of the accounts in the Debit column of the income statement column.

8. Closing Entries We have done this once before. We have done this once before. Here are the steps that we use Here are the steps that we use Close all of the accounts in the Credit column of the income statement column. Close all of the accounts in the Credit column of the income statement column. Close all of the accounts in the Debit column of the income statement column. Close all of the accounts in the Debit column of the income statement column. Close the income summary into the capital accounts Close the income summary into the capital accounts

9. Omni Imports Distribution of Net Income Statement Karl Kohen 50% of Net Income $ 34,807.93 Michelle Wu 50 % of Net Income $ 34,807.93 Net Income $ 69,615.86 We need to take a look at our Distribution of net income and it should match what the balance Of our income summary account is…… From this point on we can not use the worksheet to get our information General JournalPage 2 Date Account TitleDoc NoPost RefDebitCredit Closing Entries Dec31Sales 423120 Income Summary 423120 Dec31Income Summary 337664 Purchases 189960 Advertising Expense 6600 Credit Card Expense 3385 Insurance Expense 3170 Miscellaneous Expense 2584.15 Payroll Taxes Expense 9105 Rent Expense 21000 Salary Expense 89400 Supplies Expense - Office 4730 Supplies Expense - Store 3910 Utilities Expense 3820 Dec31Income Summary 69615.85 Karl Kohen,Captial 34807.93 Michelle Wu, Captial 34807.93

10. Closing Entries We have done this once before. We have done this once before. Here are the steps that we use Here are the steps that we use Close all of the accounts in the Credit column of the income statement column. Close all of the accounts in the Credit column of the income statement column. Close all of the accounts in the Debit column of the income statement column. Close all of the accounts in the Debit column of the income statement column. Close the income summary into the capital accounts Close the income summary into the capital accounts Close the drawing accounts into the capital accounts Close the drawing accounts into the capital accounts

11. We go back to the worksheet on page 400 and look at the drawing accounts. We need to Make those accounts zero. General JournalPage 2 Date Account TitleDoc NoPost RefDebitCredit Closing Entries Dec31Sales 423120 Income Summary 423120 Dec31Income Summary 337664 Purchases 189960 Advertising Expense 6600 Credit Card Expense 3385 Insurance Expense 3170 Miscellaneous Expense 2584.15 Payroll Taxes Expense 9105 Rent Expense 21000 Salary Expense 89400 Supplies Expense - Office 4730 Supplies Expense - Store 3910 Utilities Expense 3820 Dec31Income Summary 69615.85 Karl Kohen, Captial 34807.93 Michelle Wu, Capital 34807.93 Dec31Karl Kohen, Capital 29100 Karl Kohen, Drawing 29100 31Michelle Wu, Capital 28800 Michelle Wu, Drawing 28800

12. Post-closing trial balance Now that we have closed all of the temporary accounts. Now that we have closed all of the temporary accounts. We need to make sure that the rest of our permanent accounts are still in balance. We need to make sure that the rest of our permanent accounts are still in balance.

13. Encore Music Post-Closing Trial Balance August 31, 20xx Account TitleDebitCredit Cash29080.28 Petty Cash300 Accounts Receivable11198.4 Merchandise Inventory254640 Supplies - Office1750 Supplies - Store3034 Prepaid Insurance2630 Accounts Payable 12542.38 Employee Income Tax Payable 542 Social Security Tax Payable 985.4 Medicare Tax Payable 227.42 Sales Tax Payable 2112.05 Unemployment Tax Payable- Fed 8.4 Unemployment Tax Payable - State 56.7 Health Insurance Premiums payable 1008 U.S. Savings Bonds Payable 61 United Way Donations Payable 72 Karl Koehn, Capital 142457.93 Michelle Wu, Capital 142560.4 Totals302632.68

14. 17-1,2,3,4,5 17-1,2,3,4,5