Question

The following balances appear on the books of Sarah Simmons Enterprises: Retained Earnings, $29,600; Dividends, $10,500; Income Summary, $0; Service Revenue, $24,500; Salaries Expense, $6,200; Rent Expense, $3,500; and Advertising Expense, $2,000. All accounts have normal balances.Requirements1. Open a T-account for each account, and insert its adjusted balance as given (denote as Adj. Bal.) at December 31.2. Post the closing entries to the accounts, denoting posted amounts as Clos.3. Compute the ending balance of Retained Earnings.

Answer 1

Answer:

A. T Account balance $19,100

B. $31,600

C.$31,600

Explanation:

Sarah Simmons Enterprises

A.

T-account account

Dr Cr

Dr C/o 10500 Cr Beginning balance 29,600

Cr C/o 10500

Cr Balance 19,100

b.

Simmons enterprise retained earnings ending balance will be:

Retained earnings 29,100

Less Dividends 10,500

Balance 19,100

Add (10,500+2,000) 12,500

Balance 31,600

C. Ending balance of Simmons, Capital will be 31,600 just as in ( b) where the retained earnings ending was 31,600