Question

Robert Evans owns a business, Beachside Realty, that rents condominiums and furnishings. The adjusted trial balance at December 31 is as follows:

	Account No.	Debit Balances	Credit Balances
Cash	11	1,500
Accounts Receivable	12	2,000
Interest Receivable	13	100
Prepaid Insurance	14	1,600
Notes Receivable (long-term)	16	2,800
Equipment	18	15,000
Accumulated Depreciation	19		3,000
Accounts Payable	21		2,400
Accrued Expenses Payable	22		3,920
Income Taxes Payable	23		2,700
Unearned Rent Fees	24		500
Robert Evans, Capital	31		7,700
Robert Evans, Drawing	32	2,000	​
Rent Fees Earned	41		37,000
Furniture Rental Revenue	42		1,200
Interest Revenue	43		100
Wages Expense	51	19,000
Depreciation Expense	52	1,800
Utilities Expense	53	320
Insurance Expense	54	700
Maintenance Expense	55	9,000
Income Tax Expense	56	2,700
		58,520	58,520

​

Journalize the entry required to close the revenue and expense accounts at the end of the period.

Answer 1

Income statement

Revenues:
Rent Fees Earned	37,000
Furniture Rental Revenue	1,200
Interest Revenue	100
Total revenues		38,300
Expenses:
Wages Expense	19,000
Depreciation Expense	1,800
Utilities Expense	320
Insurance Expense	700
Maintenance Expense	9,000
Income Tax Expense	2,700
Total expenses		- 33,520
Net income		$4,780

Journal

Dec. 31	Rent Fees Earned	37,000
	Furniture Rental Revenue	1,200
	Interest Revenue	100
	Wages Expense		19,000
	Depreciation Expense		1,800
	Utilities Expense		320
	Insurance Expense		700
	Maintenance Expense		9,000
	Income Tax Expense		2,700
	Robert Evans, Capital		4,780
	(to close the revenue and expense accounts)