The company's adjusted trial balance as follows includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Owner, Capital, $63,500; Owner, Withdrawals, $2,000; Sales, $56,000; Sales Returns and Allowances, $3,000; Sales Discounts, $1,500; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare the second closing entry by selecting the account names and entering dollar amounts in the debit and credit columns.

Question

Ernest Larson

Business

1 June, 17:31

The company's adjusted trial balance as follows includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Owner, Capital, $63,500; Owner, Withdrawals, $2,000; Sales, $56,000; Sales Returns and Allowances, $3,000; Sales Discounts, $1,500; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare the second closing entry by selecting the account names and entering dollar amounts in the debit and credit columns.

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Jason Mason · Answer 1

Dr. Sales, $56,000

Cr. Income Summary account $56,000

Dr. Income Summary account $52,500

Cr. Sales Returns and Allowances, $3,000

Cr. Sales Discounts, $1,500

Cr. Depreciation Expense, $25,000

Cr. Salaries Expense, $23,000.

Dr. Owner, Capital Account $2,000

Cr. Owner, Withdrawals, $2,000

Explanation:

All the incomes and expenses accounts are closed in Income summary accounts.

Owners withdrawals balance is adjusted in the owners capital account.

The accounts of Assets, Equity and Liabilities are not closed because these are permanent accounts.

All the following accounts are permanent account

Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Owner, Capital, $63,500;;