Question

Hudson Company has the following account balances: Sales Revenue $210,200, Sales Discounts $3,930, Cost of Goods Sold $141,640, and Inventory $43,420.

Prepare the entries to record the closing of these items to Income Summary. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
(To close accounts with credit balances)
(To close accounts with debit balances)

Answer 1

S.No	Particulars	DR.	CR.
1.	To Close Accounts With Credit Balances Sales A/C To Income Summary (To Close Revenue to Income Summary)	210,200	210,200
2.	Closing InventoryA/C To Income Summary (To Close Closing Inventory to Income Summary)	43,420	43,420
2.	Sales Discount A/c    To Income Summary (To Close Sales Discount to Income Summary)	141,640	141,640

To Close Account with Debit Balances:-

S.No.	Particulars	Debit	Credit
1.	Income Summary A/C    To Cost of Goods Sold A/C (To Close Cost of Goods Sold To Income Summary)	141,640	141,640