Question

On December 31, 2018, Ditka Inc. had Retained Earnings of $279,800 before its closing entries were prepared and posted. During 2018, the company had service revenue of $180,100 and interest revenue of $87,300. The company used supplies in the amount of $93,900, advertising expenses were $17,600, salaries and wages totaled $20,100, and income tax expense was calculated as $16,100. During the year, the company declared and paid dividends of $7,200.

1. Prepare the closing entries dated December 31, 2018.
2. Prepare T-account for the Retained Earnings account. Enter the beginning balance into the T-account, post the closing entries, and then determine the ending balance.

Answer 1