Question

The partial adjusted account balances of the Raiders Fitness Center at December 31 are as follows:

Accounts                                 Account Balances       Accounts                           Account Balances

Cash                                                $ 16,000              Service Revenue                       $107,000

Accounts Receivable                         15,000              Interest Revenue                          13,000

Supplies                                                4,000              Depreciation Expense                   28,000

Prepaid Insurance                                8,000              Insurance Expense                       12,000

Buildings                                           300,000              Salaries and Wages Expense        45,000

Accumulated Depreciation—Building 120,000             Supplies Expense                            5,000

            Utilities Expense                            10,000

Accounts Payable                              19,000              Unearned Service Revenue            7,000

Common Stock                                  90,000

Retained Earnings                            115,000

Dividends                                            10,000

Instructions

Prepare the end of the period closing entries for the Raiders Fitness Center

Answer 1

Solution:

Closing Entries
No.	Account title and explanation	Debit	Credit
1	Service revenue	$1,07,000
	Interest revenue	$13,000
	To Income Summary		$1,20,000
	(To close revenue accounts)
2	Income Summary Dr	$90,000
	To Depreciation Expense		$28,000
	To Insurance sold		$12,000
	To Salaries and wages Expense		$45,000
	To supplies expense		$5,000
	(To close expense accounts)
3	Income Summary Dr [$120000- 90000]	$30,000
	To Retained Earnings		$30,000
	(To close net income)
4	Retained Earnings Dr	$10,000
	To Dividends		$10,000
	(To close dividends)