Question

The adjusted trial balance for Pharoah Golf Club at its October 31, 2021, year end included the following: Debit Credit Cash $7,500 Prepaid expenses 3,000 Equipment 65,000 Accumulated depreciation—equipment $15,000 Accounts payable 14,000 Unearned revenue 1,500 N. Pharoah, capital 65,200 N. Pharoah, drawings 45,700 Service revenue 130,700 Repairs expense 23,000 Rent expense 10,000 Salaries expense 72,200 Prepare closing entries. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Answer 1

Answer;

Closing entries:

Account titles	Debit	Credit
For service revenue;
Service revenue	130,700
Income summary		130,700
For Repairs expense;
Income summary	23,000
Repairs expense		23,000
For Rent expense;
Income summary	10,000
Rent expense		10,000
For Salaries expense;
Income summary	72,200
Salaries expense		72,200

Notes:

1. Only revenue and expense accounts need closing entries.

2. Asset, Liability and Capital accounts do not require closing entries.

3. Cash, prepaid expense, equipment do not require closing entries as they are asset accounts.

4. Accumulated depreciation is a contra asset account. It doesn't require closing entry.

5. Accounts payable and unearned revenue do not require closing entries as they are liability accounts.

6. Capital and drawings do not require closing entries.