Question

Preparing Closing Procedures The adjusted trial balance of Parker Corporation, prepared December 31, 2018, contains the following selected accounts. Adjusted Account Balances Debit Credit Service fees revenue $92,500 Interest income 2,200 Salaries expense $41,800 Advertising expense 4,300 Depreciation expense 8,700 Income tax expense 9,900 Retained earnings 42,700 a. Prepare entries to close these accounts in journal entry form. General Journal Description Debit Credit 12/31 Answer Service fees revenue Answer 92,500 Answer 0 Answer Answer 2,200 Answer 0 Answer Retained earnings Answer 0 Answer 92,500 To close the revenue accounts. 12/31 Answer Salaries expense Answer 0 Answer 0 Answer Prepaid advertising Answer 0 Answer 0 Answer Answer 0 Answer 0 Answer Answer 0 Answer 0 Answer Answer 0 Answer 0 To close the expense accounts. b. Post the closing entries to the appropriate T-accounts and calculate the ending balances for each account. Retained Earnings Bal. 42,700 Answer 0 Answer 0 Bal. Answer 0 Answer 0 Service Fees Revenue Bal. 92,500 Answer 0 Answer 0 Bal. Answer 0 Answer 0 Interest Income Bal. 2,200 Answer 0 Answer 0 Bal. Answer 0 Answer 0 Salaries Expense Bal. 41,800 Answer 0 Answer 0 Bal. Answer 0 Answer 0 Advertising Expense Bal. 4,300 Answer 0 Answer 0 Bal. Answer 0 Answer 0 Depreciation Expense Bal. 8,700 Answer 0 Answer 0 Bal. Answer 0 Answer 0

Answer 1

Answer:

Parker Corporation

a) Closing Journal Entries:

General Journal

Description                   Debit         Credit

12/31

Service fees revenue $92,500

Interest income               2,200

Retained earnings         42,700

Income Summary                          $137,400

To close credit items to the Income Summary.

Income Summary      $64,700

Salaries expense                           $41,800

Advertising expense                         4,300

Depreciation expense                       8,700

Income tax expense                         9,900

To close debit items to the Income Summary.

b. T-accounts:

                                      Debit       Credit

Service fees revenue

Adjusted balance                     $92,500

Income Summary      $92,500

Balance                      $0

Interest income

Adjusted balance                       $2,200

Income Summary      $2,200

Balance                      $0

Salaries expense

Adjusted balance    $41,800

Income Summary                     $41,800

Balance                                     $0

Advertising expense

Adjusted balance     $4,300

Income Summary                     $4,300

Balance                                     $0

Depreciation expense

Adjusted balance     8,700

Income Summary                   $8,700

Balance                                   $0

Income tax expense

Adjusted balance    9,900

Income Summary                     $9,900

Balance                                     $0

Retained earnings

Adjusted Balance                     42,700

Income Summary $42,700

Balance                 $0

Explanation:

a) Data:

Parker Corporation

Adjusted Account Balances

                                      Debit       Credit

Service fees revenue              $92,500

Interest income                            2,200

Salaries expense      $41,800

Advertising expense   4,300

Depreciation expense 8,700

Income tax expense    9,900

Retained earnings                     42,700