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    Closing Entries for Income Statements

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    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 9, 2019, 8:58 pm ad1c9bdddf
    https://brainmass.com/business/the-closing-process/closing-entries-income-statements-168749

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    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