Explore BrainMass
Share

Closing Entries for Income Statements

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

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.

© BrainMass Inc. brainmass.com October 24, 2018, 10:44 pm ad1c9bdddf
https://brainmass.com/business/the-closing-process/closing-entries-income-statements-168749

Attachments

Solution Preview

Hello

Please find the solutions attached.

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...

Solution Summary

This solution provides closing entries for income statements.

$2.19
See Also This Related BrainMass Solution

Preparing Closing Entries, Financial Statements, and Ratios

See attachment for full data tables.

1. Prepare the income statement and the statement of owner's equity for the calendar year 2005 and the classified balance sheet at December 31, 2005.

2. Prepare necessary closing entries at December 31, 2005.

3. Use the information in the financial statements to calculate these ratios: (a) return on assets (total assets at December 31, 2004, was $150,000), (b) debt ratio, (c) profit margin ratio (use total revenues as the denominator), and (d) current ratio.

View Full Posting Details