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26 February, 00:18

American Chip Corporation's reporting year-end is December 31. The following is a partial adjusted trial balance as of December 31, 2021. Account Title Debits Credits Retained earnings 81,000 Sales revenue 760,000 Interest revenue 3,500 Cost of goods sold 425,000 Salaries expense 110,000 Rent expense 16,000 Depreciation expense 31,000 Interest expense 5,100 Insurance expense 6,100 Required: Prepare the necessary closing entries at December 31, 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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  1. 26 February, 02:13
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    The closing entry for the following accounts are shown below:

    1. Sales Revenue A/c Dr 760,000

    Interest Revenue A/c Dr $3,500

    To Income Summary $763,500

    (Being revenue account closed)

    2. Income summary A/c Dr $593,200

    To cost of goods sold $425,000

    To Interest Expense $5,100

    To Salaries Expense $110,000

    To depreciation Expense $31,000

    To Rent Expense $16,000

    To Insurance expense $6,100

    (Being expenses accounts are closed)

    3. Income summary A/c Dr $170,300

    To Retained earning $170,300

    (Being the difference is credited to retained earning)

    The retained earning is computed by

    = Number 1 - Number 2

    = $763,500 - $763,500

    = $170,300
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