Question

On July 31, 20Y7, the balances of the accounts appearing in the ledger of Yang Interiors Company, a furniture wholesaler, are as follows: Accumulated Depreciation-Building $443,000 Administrative Expenses 534,000 Building 984,000 Cash 95,000 Cost of Merchandise Sold 941,000 Interest Expense 7,000 Merchandise Inventory 140,000 Notes Payable 121,000 Peter Bronsky, Capital 644,000 Peter Bronsky, Drawing 18,000 Sales 1,745,000 Sales Tax Payable 4,500 Selling Expenses 194,000 Store Supplies 19,000 Store Supplies Expense 25,500 Required: Prepare the July 31, 20Y7, closing entries for Yang Interiors Company. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

Answer 1

Solution:

Closing Entries:

No.	Date	Closing Entries	Debit ($)	Credit ($)
1.	July 31	Sales	1,745,000
		Income summary		1,745,000
2.		Income summary	1,701,500
		Cost of merchandise sold		941,000
		Administrative expenses		534,000
		Selling expenses		194,000
		Interest expenses		7,000
		Store supplies expenses		25,500
3.	July 31	Income summary ($1,745,000 - $1,701,500)	43,500
		Peter Bronsky, Capital		43500
4.	July 31	Peter Bronsky, Capital	18,000
		Peter Bronsky, Drawings		18,000