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The following information relates to TipTopTea for the year ended 30 June 2020. Accounts payable 82,500...

The following information relates to TipTopTea for the year ended 30 June 2020. Accounts payable 82,500 Accounts receivable 7,500 Accumulated depreciation- Equipment 11,800 Bank Loan (due in 2025) 38,000 Capital 105,400 Cash at bank 186,400 Depreciation expense-Equipment 8,600 Drawings 4,000 Electricity expense 7,500 Equipment 180,000 Prepaid rent 16,500 Rent expense 32,000 Service revenue 282,600 Supplies 3,900 Unearned revenue 19,200 Wages expense 135,400 Wages payable 42,500 Required; Prepare the closing entries for TipTopTea as at 30 June 2020. Narrations are required.

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Answer #1

Closing Entries on 30 June 2020

No Accounts title Debit Credit
1.   Service Revenue 282,600
Income Summary 282,600
(to close Revenue accounts)
2. Income Summary 183,500
  Depreciation Expense 8,600
Electricity expense 7,500
  Rent Expense 32,000
Wages Expense 135,400
(to close expenses account)
3. Income Summary 99,100
Retained Earnings 99,100
(to close Net Income balance of Income Summary)
4. Retained Earnings 4,000
Drawings 4,000
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