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Closing Entries

Company's accounting records carried the following accounts.(amounts in millions)

inventory $5,489

interest earned $ 37

accounts payable $ 1,993

cost of goods sold $27,023

other expenses $ 1, 597

owner withdrawals $ 255

selling expenses $ 6,832

sales revenue $ 38,434

interest expense $ 28

receivables $ 587

general admin.
expense $ 671

i) What I need to understand is how to Journalize all of the company's closing entries at January 31st, 2001. Using an owner capital account.

ii) Also need assistance in setting up T-ACCOUNTS for the Income Summary account and the Owner CAPITAL account.

post to these accounts and take their ending balances. One year earlier, at January 31st 2000, The Owner Capital balance was $8,740 million

Any assistance would be appreciated.

Solution Preview

i) What I need to understand is how to Journalize all of the company's closing entries at January 31st, 2001. Using an owner capital account.

In closing entries, we close the temporary accounts. The temporary accounts are the income statement accounts. These accounts are closed to income summary and then the income summary is closed to the owner capital account. The journal entries ...

Solution Summary

The solution explains how to journalize closing entries and posting to T-accounts

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