E3-13_b
Question
E3-13 (Lo5,6) (Closing Entries) The adjusted trial balance of Lopez Company shows the following data pertaining to sales at the end of its fiscal year, October 31, 2017: Sales Revenue \(800,000, Delivery Expenses \)12,000, Sales Returns and Allowances \(24,000 and Sales Discounts \)15,000.
Instructions:
(b) Prepare separate closing entries for (1) Sales and (2) the contra accounts to sales.
Step-by-Step Solution
Verified Answer
The amount of income summary expenses is $39,000.
1Meaning of Closing Entry
The term closing entries is a set of journal entries made at the end of the accounting period that transfer temporary account balances into a permanent account. The purpose of closing entries is to merge the bills so a company can determine its retained earnings.
2Closing entries
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