Question

On December 31, 2016, Ditka Inc. had Retained Earnings of $272,800 before its closing entries were...

On December 31, 2016, Ditka Inc. had Retained Earnings of $272,800 before its closing entries were prepared and posted. During 2016, the company had service revenue of $173,100 and interest revenue of $83,800. The company used supplies in the amount of $90,400, advertising expenses were $16,900, salaries and wages totaled $19,050, and income tax expense was calculated as $14,700. During the year, the company declared and paid dividends of $6,500.
Required:
a. Prepare the closing entries dated December 31, 2016. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
b.

Prepare T-account for the Retained Earnings account.
Business   Accounting   
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Answer #1

a) Closing entries

No General Journal Debit Credit
a Service revenue 173100
Interest revenue 83800
Income summary 256900
b Income summary 141050
Supplies expense 90400
Advertising expense 16900
Salaries and wages expense 19050
Income tax expense 14700
c Income summary 115850
Retained earnings 115850
d Retained earnings 6500
Dividend 6500

T account

Dividend paid 6500 Beg Bal 272800
Net income 115850
End Bal 382150
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