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Rand Company: Prepare closing entries and determine Retained Earnings balance

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Presented below is an adjusted trial balance for Rand Company, at December 31, 2007.

Cash $ 19,700 Accounts payable $ 15,000
Accounts receivable 20,000 Notes payable 9,000
Prepaid insurance 15,000 Accumulated depreciation?
Equipment 35,000 equipment 14,000
Depreciation expense 7,000 Service revenue 30,000
Dividends 5,500 Common stock 15,000
Advertising expense 1,400 Retained earnings 9,000
Rent expense 800 Unearned service revenue 16,000
Salary expense 1,000
Insurance expense 2,600
$108,000 $108,000
(a) Prepare closing entries for December 31, 2007.

(b) Determine the balance in the Retained Earnings account after the entries have been posted.

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Please see the attachment for details.

(a) Prepare closing entries for December 31, 2007.
(b) Closing entries in the books of Rand Company Foe the year ending on December 31,2007
Date Particulars Debit Credit
Service revenue 30000
Income summary ...

Solution Summary

Given the adjusted trial balance for Rand Company, the solution prepared the closing entries in good form followed with a schedule to reconcile retained earnings after the closing entries would have been posted.