retained earnings 155,100\ndividends declared 3,200\nretained earnings 3,200\nrequired:\n1. prepare the…

retained earnings 155,100\ndividends declared 3,200\nretained earnings 3,200\nrequired:\n1. prepare the correct closing entries. assume that all necessary accounts are presented above and that the amounts given are correct. if an amount box does not require an entry, leave it blank.\ndecember 31 service revenue 180,000\naccumulated depreciation 180,000\ndecember 31 accumulated depreciation 150,600\ndepreciation expense 33,000\nincome taxes expense 8,200\nutilities expense 12,400\nwages expense 66,000\nsupplies expense 31,000\ndecember 31 retained earnings 29,400\ndividends declared 29,400\n2. conceptual connection: explain why closing entries are necessary.\nthe purpose of the closing entries is to the balances in the revenue, expense, and dividends accounts. this transfer the balances of these temporary accounts to zero.

retained earnings 155,100\ndividends declared 3,200\nretained earnings 3,200\nrequired:\n1. prepare the correct closing entries. assume that all necessary accounts are presented above and that the amounts given are correct. if an amount box does not require an entry, leave it blank.\ndecember 31 service revenue 180,000\naccumulated depreciation 180,000\ndecember 31 accumulated depreciation 150,600\ndepreciation expense 33,000\nincome taxes expense 8,200\nutilities expense 12,400\nwages expense 66,000\nsupplies expense 31,000\ndecember 31 retained earnings 29,400\ndividends declared 29,400\n2. conceptual connection: explain why closing entries are necessary.\nthe purpose of the closing entries is to the balances in the revenue, expense, and dividends accounts. this transfer the balances of these temporary accounts to zero.

Answer

Explanation:

Step1: Close revenue account

Debit Service Revenue for its balance of 180,000 and credit Income Summary (not shown in the given accounts but a common closing - step account) for 180,000. In the given format: December 31 Service Revenue 180,000 (debit) 0 (credit) December 31 (no entry for Accumulated Depreciation in this closing - step for revenue)

Step2: Close expense accounts

Debit Income Summary and credit each expense account. Sum of expenses: 33,000 (Depreciation Expense)+8,200 (Income Taxes Expense)+12,400 (Utilities Expense)+66,000 (Wages Expense)+31,000 (Supplies Expense)=150,600 December 31 Accumulated Depreciation 0 (no entry in this closing - step for expenses) 0 December 31 Depreciation Expense 0 33,000 (credit) December 31 Income Taxes Expense 0 8,200 (credit) December 31 Utilities Expense 0 12,400 (credit) December 31 Wages Expense 0 66,000 (credit) December 31 Supplies Expense 0 31,000 (credit)

Step3: Close dividends account

Debit Retained Earnings and credit Dividends Declared. December 31 Retained Earnings 3,200 (debit) 0 (credit) December 31 Dividends Declared 0 3,200 (credit)

Step4: Explain closing - entry necessity

Closing entries are necessary to transfer the balances in the revenue, expense, and dividends accounts. This transfer resets the balances of these temporary accounts to zero.

Answer:

December 31 Service Revenue 180,000 0 December 31 Accumulated Depreciation 0 0 December 31 Accumulated Depreciation 0 0 December 31 Depreciation Expense 0 33,000 December 31 Income Taxes Expense 0 8,200 December 31 Utilities Expense 0 12,400 December 31 Wages Expense 0 66,000 December 31 Supplies Expense 0 31,000 December 31 Retained Earnings 3,200 0 December 31 Dividends Declared 0 3,200 2. The purpose of the closing entries is to transfer the balances in the revenue, expense, and dividends accounts. This transfer resets the balances of these temporary accounts to zero.