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19 October, 01:07

The ledger of Mai Company includes the following accounts with normal balances: D. Mai, Capital $9,500; D. Mai, Withdrawals $1,050; Services Revenue $18,000; Wages Expense $10,900; and Rent Expense $2,600. Prepare the necessary closing entries from the available information at December 31. g

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  1. 19 October, 01:12
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    The closing entries are shown below:

    Explanation:

    The closing entry for the following accounts are given below:

    1. Service Revenue A/c Dr $18,000

    To Income Summary $18,000

    (Being revenue account closed)

    2. Income summary A/c Dr $13,500

    To Wages Expense $10,900

    To Rent Expense $2,600

    (Being expenses accounts are closed)

    3. Income summary A/c Dr $4,500 ($18,000 - $13,500)

    To Retained earning $4,500

    (Being the difference is credited to retained earning)

    4. Retained earnings A/c Dr $1,050

    To D. Mai, Withdrawals $1,050

    (Being withdrawal account is closed)
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