Question

Q1. Following is the year-end adjusted trial balance for Yakima's Sporting Goods for the current year (Amounts in Saudi riyal) 4 marks

Yakima’s Sporting Goods Adjusted Trial Balance December 31
	Dr	Cr
Cash	67,400
Accounts receivable	46,000
Merchandise inventory	50,000
Office supplies	800
Accounts payable		16,000
Salaries payable		850
Common stock		50,000
Retained earnings		75,530
Dividends	5,000
Sales		500,000
Sales returns & allowances	4,500
Sales discounts	4,250
Cost of goods sold	382,450
Sales salaries expense	44,000
Advertising expense	8,150
Office salaries expense	24,325
Office supplies expense	450
Interest expense	5,055
Totals	642,380	642,380

Required: Prepare the closing entries and post closing trial balance at December 31 for the current year.

Answer 1

Closing entry :

date	accounts & explanation	debit	Credit
Dec 31	Sales revenue	500000
	Income summary		500000
	(To close revenue account)
Dec 31	Income summary	473180
	Sales returns & allowances		4500
	Sales discounts		4250
	Cost of goods sold		382450
	Sales salaries expense		44000
	Advertising expense		8150
	Office salaries expense		24325
	Office supplies expense		450
	Interest expense		5055
	(To close expense account)
Dec 31	Income summary	26820
	Retained earnings		26820
	(To close income summary account)
Dec 31	Retained earnings	5000
	Dividend		5000
	(TO close dividend account)

Prepare post closing trial balance :

	Debit	Credit
Cash	67400
Account receivable	46000
Merchandise inventory	50000
Office supplies	800
Accounts payable		16000
Salaries payable		850
Common stock		50000
Retained earnings		97350
Total	164200	164200