Ask Question
27 March, 18:41

On December 31, 2016, Ditka Inc. had Retained Earnings of $285,800 before its closing entries were prepared and posted. During 2016, the company had service revenue of $186,100 and interest revenue of $90,300. The company used supplies in the amount of $96,900, advertising expenses were $18,200, salaries and wages totaled $21,000, and income tax expense was calculated as $17,300. During the year, the company declared and paid dividends of $7,800. Prepare the closing entries dated December 31, 2016.

+2
Answers (1)
  1. 27 March, 22:12
    0
    Closing Entries Dated 31, 2016

    Dr. Cr.

    Closing Income Accounts

    Service revenue $186,100

    Interest revenue $90,300

    Income Summary $276,400

    Closing Expense Accounts

    Income Summary $153,400

    Supplies Expense $96,900

    Advertising expenses $18,200

    Salaries and wages $21,000

    Income tax expense $17,300

    Closing Income Summary Account

    Income Summary $123,000

    Retained Earning $123,000

    Closing Dividend Account

    Retained Earning $7,800

    Dividend $7,800

    Explanation:

    All the Income and Expenses accounts are closed to Income summary account. The net balance of income summary account is transferred to retained earning account. The dividend balance is also transferred to retained earning account to close it. Ultimately all the balances are netted off in retained earning account.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “On December 31, 2016, Ditka Inc. had Retained Earnings of $285,800 before its closing entries were prepared and posted. During 2016, the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers