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; Retained earnings, $59,000; Dividends, $2,000; Fees Earned, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare closing entry #1.

Question

Cheyenne Goodwin

Business

2 October, 16:42

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; Retained earnings, $59,000; Dividends, $2,000; Fees Earned, $56,000; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare closing entry #1.

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Cristina Morales · Answer 1

Dr. Fees Earned $56,000

Cr. Income Summary $56,000

Explanation:

Prepare closing entry # 1

Close means to make the balance zero. From the Adjusted Trial Balance that Fees Earned Account has a credit balance of $56,000 and to make it zero we will credit it with Income Summary Account, as follows;

(+) Fees Earned $56,000

(-) Income Summary $56,000

To Close Fees Earned Account