Question

On December 31, after adjustments, Gonzalez Company's ledger contains the following account balances: 101 Cash $...

On December 31, after adjustments, Gonzalez Company's ledger contains the following account balances:

101 Cash $ 94,400 Dr.
111 Accounts Receivable 35,600 Dr.
121 Supplies 8,000 Dr.
131 Prepaid Rent 81,200 Dr.
141 Equipment 128,000 Dr.
142 Accumulated Depreciation—Equip. 4,000 Cr.
202 Accounts Payable 17,000 Cr.
301 Emilio Gonzalez, Capital (12/1/2019) 131,240 Cr.
302 Emilio Gonzalez, Drawing 16,400 Dr.
401 Fees Income 327,200 Cr.
511 Advertising Expense 11,600 Dr.
514 Depreciation Expense—Equip. 2,000 Dr.
517 Rent Expense 9,200 Dr.
519 Salaries Expense 77,600 Dr.
523 Utilities Expense 15,440 Dr.


Required:

  1. Journalize the closing entries in the general journal.
  2. Post the closing entries to the general ledger accounts. Hint: Be sure to enter beginning balances.
  3. Analyze: What is the balance of the Salaries Expense account after closing entries are posted?

Req 1. Journalize the closing entries in the general journal.

  • 1. Record the closing entry for revenue.

  • 2. Record the closing entry for expenses.

  • 3. Record the closing entry for the balance of income summary.

  • 4. Record the closing entry for the drawing account.

Req 2. Post the closing entries to the general ledger accounts. Hint: Be sure to enter beginning balances.

Emilio Gonzalez, Capital Account No. 301 Emilio Gonzalez, Drawing Account No. 302
Date Debit Credit Balance Date Debit Credit Balance
Dec 31, 2019 131,240 Dec 31, 2019 16,400
Dec 31, 2019 Dec 31, 2019
Dec 31, 2019
Income Summary Account No. 399 Fees Income Account No. 401
Date Debit Credit Balance Date Debit Credit Balance
Dec 31, 2019 Dec 31, 2019 327,200
Dec 31, 2019 Dec 31, 2019
Dec 31, 2019
Advertising Expense Account No. 511 Depreciation Expense—Equipment Account No. 514
Date Debit Credit Balance Date Debit Credit Balance
Dec 31, 2019 11,600 Dec 31, 2019 2,000
Dec 31, 2019 Dec 31, 2019
Rent Expense Account No. 517 Salaries Expense Account No. 519
Date Debit Credit Balance Date Debit Credit Balance
Dec 31, 2019 9,200 Dec 31, 2019 77,600
Dec 31, 2019 Dec 31, 2019
Utilities Expense Account No. 523
Date Debit Credit Balance
Dec 31, 2019 15,440
Dec 31, 2019

Req 3. What is the balance of the salaries expense account after closing entries are posted?

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Homework Answers

Answer #1
Req. 1) Closing Entries
Events Particulars Debit Credit
1) Fees Income $ 327,200.00
To Income Summary $ 327,200.00
2) Income Summary $ 115,840.00
To Advertising Expense $   11,600.00
To Depreciation Expense $     2,000.00
To Rent Expense $     9,200.00
To Salaries Expense $   77,600.00
To Utilities Expense $   15,440.00
3) Income Summary $ 211,360.00
To Emilio Gonzalez, Capital $ 211,360.00
4) Emilio Gonzalez, Capital $   16,400.00
To Emilio Gonzalez, Drawing $   16,400.00
Req.2) Emilio Gonzalez, Capital Account No. 301 Emilio Gonzalez, Drawing Account No. 302
Date Debit Credit Balance Date Debit Credit Balance
31-Dec-19 $131,240.00 31-Dec-19 $16,400.00
31-Dec-19 $211,360.00 $342,600.00 31-Dec-19 $16,400.00 $            -  
31-Dec-19 $ 16,400.00 $326,200.00
Income Summary Account No. 399 Fees Income Account No. 401
Date Debit Credit Balance Date Debit Credit Balance
31-Dec-19 $327,200.00 $327,200.00 31-Dec-19 327,200
31-Dec-19 $115,840.00 $211,360.00 31-Dec-19 $327,200.00 $            -  
31-Dec-19 $211,360.00 $             -  
Advertising Expense Account No. 511 Depreciation Expense—Equipment Account No. 514
Date Debit Credit Balance Date Debit Credit Balance
31-Dec-19 $ 11,600.00 31-Dec-19 $ 2,000.00
31-Dec-19 $ 11,600.00 $             -   31-Dec-19 $ 2,000.00 $            -  
Rent Expense Account No. 517 Salaries Expense Account No. 519
Date Debit Credit Balance Date Debit Credit Balance
31-Dec-19 $    9,200.00 31-Dec-19 $77,600.00
31-Dec-19 $    9,200.00 $             -   31-Dec-19 $77,600.00 $            -  
Utilities Expense Account No. 523
Date Debit Credit Balance
31-Dec-19 $ 15,440.00
31-Dec-19 $ 15,440.00 $             -  
Req.3) Balance of salaries expense 0
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