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31 May, 13:27

The company's adjusted trial balance as follows includes the following accounts balances: Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Owner, Capital, $63,500; Owner, Withdrawals, $2,000; Sales, $56,000; Sales Returns and Allowances, $3,000; Sales Discounts, $1,500; Depreciation Expense, $25,000; and Salaries Expense, $23,000. All accounts have normal balances. Prepare the second closing entry by selecting the account names and entering dollar amounts in the debit and credit columns.

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  1. 31 May, 16:20
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    Dr. Sales, $56,000

    Cr. Income Summary account $56,000

    Dr. Income Summary account $52,500

    Cr. Sales Returns and Allowances, $3,000

    Cr. Sales Discounts, $1,500

    Cr. Depreciation Expense, $25,000

    Cr. Salaries Expense, $23,000.

    Dr. Owner, Capital Account $2,000

    Cr. Owner, Withdrawals, $2,000

    Explanation:

    All the incomes and expenses accounts are closed in Income summary accounts.

    Owners withdrawals balance is adjusted in the owners capital account.

    The accounts of Assets, Equity and Liabilities are not closed because these are permanent accounts.

    All the following accounts are permanent account

    Cash, $15,000; Equipment, $85,000; Accumulated Depreciation, $25,000; Accounts Payable, $10,000; Owner, Capital, $63,500;;
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