Closing Entries
An accountant for Jolley, Inc., a merchandising enterprise, has just finished posting all yearend adjusting entries to the ledger accounts and now wishes to close the appropriate account balances in preparation for the new period.
1. For each of the accounts listed, indicate whether the year end balance should be
(a) carried forward to the new period, (b) closed by debiting the account, or (c) closed by crediting the account.
|
(a) |
Cash |
$ 25,000 |
|
(b) |
Sales |
75,000 |
|
(c) |
Dividends |
3,500 |
|
(d) |
Inventory |
7,500 |
|
(e) |
Selling Expenses |
7,900 |
|
(f) |
Capital Stock |
100,000 |
|
(g) |
Wages Expense |
14,400 |
|
(h) |
Dividends Payable |
4,000 |
|
(i) |
Cost of Goods Sold |
26,500 |
|
(j) |
Accounts Payable |
12,000 |
|
(k) |
Accounts Receivable |
140,000 |
|
(l) |
Prepaid Insurance |
16,000 |
|
(m) |
Interest Receivable |
1,500 |
|
(n) |
Sales Discounts |
4,200 |
|
(o) |
Interest Revenue |
6,500 |
|
(p) |
Supplies |
8,000 |
|
(q) |
Retained Earnings |
6,500 |
|
(r) |
Accumulated Depreciation |
2,000 |
|
(s) |
Depreciation Expense |
1,800 |
2. Give the necessary closing entries.
3. What was Jolley’s net income (loss) for the period?