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Preparing Closing Entries

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Preparing Closing Entries
1) Prepare the necessary closing entries at 12-31-08.
2) What is the balance in the Retained earnings account after closing entries are posted?

Accounts Receivable $128,000
Accounts Payable 7,500
Advertising expense 2,500
Accumulated Depreciation 12,500
Cash 18,300
Certificate of Deposit 22,000
Common Stock 20,000
Deprecation Expense 4,800
Dividends 2,000
Equipment 10,000
Interest Receivable 400
Interest Revenue 1,800
Notes Payable 10,000
Prepaid rent 3,200
Rent Expense 9,800
Retained Earnings 6,800
Salaries Expense 26,000
Salaries Payable 5,000
Service Revenue 85,500
Supplies 400
Supplies Expense 1,900

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This solution looks at preparing closing entries and finding the balance in the retained earnings account.

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