An adjusted trial balance a merchandiser is given below
Debit Credit
Cash $12,600
Accounts Receivable 2,400
Prepaid Rent 800
Merchandise Inventory 30,000
Accounts Payable $4,200
Salaries Payable 1,000
Notes Payable 800
Common Stock 10,000
Retained Earnings 3,800
Dividends 1,000
Sales Revenue 96,000
Sales Returns and Allowances 1,600
Sales Discounts 400
Cost of Goods Sold 23,000
Salaries Expense 21,000
Rent Expense 14,000
Selling Expense 8,500
Supplies Expense 500 ________
Total $115,800 $115,800
Provide journal entries to close the Income Summary account and the Dividends account.
What will be an ideal response
Income Summary* 27,000
Retained Earnings 27,000
Retained Earnings 1,000
Dividends 1,000 .*Calculation of net income:
Sales Revenue $96,000
Less:
Sales Returns and Allowances 1,600
Sales Discounts 400
Cost of Goods Sold 23,000
Salaries Expense 21,000
Rent Expense 14,000
Administrative Expense 8,500
Supplies Expense 500
Net Income $27,000
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