Share
Explore BrainMass

Closing Entries for Income Statements

Closing Entries
The income statement for Quality Plumbing, Inc., for the year ended December 31, 2006, is as follows:

Quality Plumbing, Inc.
Income Statement
For the Year Ended December 31, 2006
Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $623,400
Less expenses:
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $447,000
Wages expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,350
Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,720
Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,790
Property tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,110
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000
Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,830
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,300
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592,100
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31,300
Dividends of $23,200 were paid on December 30, 2006.

Required:
1. Give the entry required on December 31, 2006, to properly close the income statement accounts.
2. Give the entry required to close the dividends account at December 31, 2006.

Attachments

Solution Summary

This solution provides closing entries for income statements.

$2.19