use the may 31 fiscal year - end information from the following ledger accounts (assume that all accounts…

use the may 31 fiscal year - end information from the following ledger accounts (assume that all accounts have normal balances) to (a) prepare closing journal entries and (b) post those entries to ledger accounts. general ledger m. muncel, capital acct. no. 301 salaries expense acct. no. 622 date pr debit credit balance date pr debit credit balance may 31 g2 40,000 may 31 g2 20,000 m. muncel, withdrawals acct. no. 302 insurance expense acct. no. 637 date pr debit credit balance date pr debit credit balance may 31 g2 22,000 may 31 g2 4,400 services revenue acct. no. 403 rent expense acct. no. 640 date pr debit credit balance date pr debit credit balance may 31 g2 76,000 may 31 g2 8,400 depreciation expense acct. no. 603 income summary acct. no. 901 date pr debit credit balance date pr debit credit balance may 31 g2 15,000 check m muncel, capital (ending balance) $46,200 exercise 4 - 8 preparing and posting closing entries p2

use the may 31 fiscal year - end information from the following ledger accounts (assume that all accounts have normal balances) to (a) prepare closing journal entries and (b) post those entries to ledger accounts. general ledger m. muncel, capital acct. no. 301 salaries expense acct. no. 622 date pr debit credit balance date pr debit credit balance may 31 g2 40,000 may 31 g2 20,000 m. muncel, withdrawals acct. no. 302 insurance expense acct. no. 637 date pr debit credit balance date pr debit credit balance may 31 g2 22,000 may 31 g2 4,400 services revenue acct. no. 403 rent expense acct. no. 640 date pr debit credit balance date pr debit credit balance may 31 g2 76,000 may 31 g2 8,400 depreciation expense acct. no. 603 income summary acct. no. 901 date pr debit credit balance date pr debit credit balance may 31 g2 15,000 check m muncel, capital (ending balance) $46,200 exercise 4 - 8 preparing and posting closing entries p2

Answer

Explanation:

Step1: Close revenue account

Debit Services Revenue (Acct. No. 403) for its balance of 76,000 and credit Income Summary (Acct. No. 901). Debit: Services Revenue 76,000 Credit: Income Summary 76,000

Step2: Close expense accounts

Debit Income Summary and credit each expense account for their balances. Salaries Expense (Acct. No. 622) = 20,000 Insurance Expense (Acct. No. 637) = 4,400 Rent Expense (Acct. No. 640) = 8,400 Depreciation Expense (Acct. No. 603) = 15,000 Total expenses = 20,000 + 4,400+8,400 + 15,000 = 47,800 Debit: Income Summary 47,800 Credit: Salaries Expense 20,000 Credit: Insurance Expense 4,400 Credit: Rent Expense 8,400 Credit: Depreciation Expense 15,000

Step3: Close Income Summary

The balance in Income Summary is 76,000 - 47,800=28,200 (credit balance). Debit Income Summary and credit M. Muncel, Capital (Acct. No. 301). Debit: Income Summary 28,200 Credit: M. Muncel, Capital 28,200

Step4: Close withdrawals account

Debit M. Muncel, Capital and credit M. Muncel, Withdrawals (Acct. No. 302) for its balance of 22,000. Debit: M. Muncel, Capital 22,000 Credit: M. Muncel, Withdrawals 22,000

Answer:

Closing journal entries: 1.

Account Title Debit Credit
Services Revenue 76,000
Income Summary 76,000
Account Title Debit Credit
Income Summary 47,800
Salaries Expense 20,000
Insurance Expense 4,400
Rent Expense 8,400
Depreciation Expense 15,000
Account Title Debit Credit
Income Summary 28,200
M. Muncel, Capital 28,200
Account Title Debit Credit
M. Muncel, Capital 22,000
M. Muncel, Withdrawals 22,000

Post - closing ledger accounts: M. Muncel, Capital (Acct. No. 301)

Date PR Debit Credit Balance
May 31 G2 40,000 40,000
May 31 28,200 68,200
May 31 22,000 46,200

Salaries Expense (Acct. No. 622)

Date PR Debit Credit Balance
May 31 G2 20,000 20,000
May 31 20,000 0

Insurance Expense (Acct. No. 637)

Date PR Debit Credit Balance
May 31 G2 4,400 4,400
May 31 4,400 0

Rent Expense (Acct. No. 640)

Date PR Debit Credit Balance
May 31 G2 8,400 8,400
May 31 8,400 0

Depreciation Expense (Acct. No. 603)

Date PR Debit Credit Balance
May 31 G2 15,000 15,000
May 31 15,000 0

Services Revenue (Acct. No. 403)

Date PR Debit Credit Balance
May 31 G2 76,000 76,000
May 31 76,000 0

M. Muncel, Withdrawals (Acct. No. 302)

Date PR Debit Credit Balance
May 31 G2 22,000 22,000
May 31 22,000 0

Income Summary (Acct. No. 901)

Date PR Debit Credit Balance
May 31 47,800 76,000 28,200
May 31 28,200 0