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    Closing Entries and Owner's Equity Balance

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    On December 31, 2008. Kings Bait and Tackle had the following ending account balances after all adjusting entries were completed.
    Cash $35,000
    Inventory 29,000
    Supplies 8,500
    Prepaid rent 7,000
    Equipment 83,900
    Accumulated Depreciation ($17,400)
    Accounts payable 41,220
    Wages payable 10,5000
    Owners' equity 50,000
    Sales revenue 99,000
    Cost od goods sold 21,000
    Wages expense 15,000
    Utilities expense 1,020
    Depreciation expense 3,200
    Insureance expense 1,000
    Supplies expense 1,500
    rent expense 12,000

    A. Please post both closing entries that will be done at the end of the year.
    B. What is the ending owners' equity balance?

    Please use the following format when recording your closing entries:
    Debit account name
    Credit account name

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    Solution Preview

    A -- The 1st closing entry will be made to close sales revenue and bring it to a zero balance.

    Sales 99,000
    Income summary 99,000 (the sales acct. is always closed to ...

    Solution Summary

    This solution provides the correct journal entries and owners' equity balance for the exercise given.