Question

On March 31, 20Y4, the balances of the accounts appearing in the ledger of Danns Furnishings Company, a furniture wholesaler, are as follows: Accumulated Depreciation-Building $419,000 Administrative Expenses 302,000 Building 1,397,000 Cash 98,000 Cost of Merchandise Sold 2,123,000 Interest Expense 6,000 Kathy Melman, Capital 887,000 Kathy Melman, Drawing 98,000 Merchandise Inventory 547,000 Notes Payable 140,000 Office Supplies 11,000 Salaries Payable 4,000 Sales 3,582,000 Selling Expenses 400,000 Store Supplies 50,000 Journalize the closing entries. 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:

No.	Account title and explanation	Debit	Credit
1	Sales Dr	$35,82,000
	To Income Summary		$35,82,000
	(To close revenue accounts)
2	Income Summary Dr	$28,31,000
	To Administrative Expense		$3,02,000
	To Cost of merchandise sold		$21,23,000
	To Interest Expense		$6,000
	To Selling Expense		$4,00,000
	(To close expense accounts)
3	Income Summary Dr [$3582000-2831000]	$7,51,000
	To Kathy Melman, Capital		$7,51,000
	(To close net income)
4	Kathy Melman, Capital Dr	$98,000
	To Kathy Melman, drawings		$98,000
	(To close withdrawals)