CHAPTER 16 Recording Adjusting and Closing Entries for a Corporation

CHAPTER 16

Recording Adjusting and Closing Entries for a Corporation

2

ADJUSTING ENTRIES RECORDED FROM A WORK SHEET

33

page 480

22 11 44 5566 77

1. Heading

2. Date

3. Identify the first adjustment

4. Account debited

5. Debit

6. Account credited

7. Credit

8. Continue down the Adjustments columns

3

ADJUSTING ENTRY FOR ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS page 482

4

ADJUSTING ENTRY FOR MERCHANDISE INVENTORY page 482

5

ADJUSTING ENTRY FOR SUPPLIES—OFFICE page 483

6

ADJUSTING ENTRY FOR SUPPLIES—STORE page 483

7

ADJUSTING ENTRY FOR PREPAID INSURANCE page 484

8

ADJUSTING ENTRY FOR DEPRECIATION—OFFICE EQUIPMENT page 484

9

ADJUSTING ENTRY FOR DEPRECIATION—STORE EQUIPMENT page 485

10

ADJUSTING ENTRY FOR FEDERAL INCOME TAXES page 485

LESSON 16-2

Recording Closing Entries for Income Statement Accounts

12

THE INCOME SUMMARY ACCOUNT page 487

13

CLOSING ENTRY FOR ACCOUNTS WITH CREDIT BALANCES

1122

page 488

3. Debits to close

44

1. Heading

2. Date 4. Credit to Income Summary

3333

14

CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCES

1122 44

page 489

3. Credits to close

1. Date

2. Account debited

4. Debit amount

33

33

15SUMMARY OF CLOSING ENTRY FOR INCOME STATEMENT ACCOUNTS WITH DEBIT BALANCES page 490

Bal. 209,960.00 Closing 209,960.00

(New Bal. zero)

Purchases

Adj. (mdse. inv.) 15,840.00 Closing (credit amounts) 500,253.10

Closing (debit accounts) 404,099.15 (New Bal. 80,313.95)

Income Summary

16

CLOSING ENTRY TO RECORD NET INCOME page 491

1122

33

3. Credit Retained Earnings

1. Date

2. Debit Income Summary

17

CLOSING ENTRY FOR DIVIDENDS page 491

3. Credit Dividends

1. Date

2. Debit Retained Earnings

1122

33

18

COMPLETED CLOSING ENTRIES FOR A CORPORATION RECORDED IN A JOURNAL page 492