Question 11BE - Intermediate Accounting (Kieso)

Question

BE3-11 (L04) Side Kicks has year-end account balances of Sales Revenue \(808,900, Interest Revenue \)13,500, Cost of Goods Sold \(556,200, Administrative Expenses \)189,000, Income Tax Expense \(35,100, and Dividends \)18,900. Prepare the year-end closing entries

Step-by-Step Solution

Answer

The amount of income tax expenses is $35,100.

Meaning of Closing Entries

Journal entries recorded by the business entity to close the temporary account are known as closing entries. These entries move balances to a permanent account, leading to zero balances in the temporary account. 

Closing Entries

Date	Accounts and Explanation	Debit $	Credit $
	Sales Revenue	$808,900
	Interest Revenue	$13,500
	Income Summary		$822,400
	Income Summary	$780,300
	Cost of Goods Sold		$556,200
	Administrative Expenses		$189,000
	Income Tax Expenses		$35,100
	Income Summary	$42,100
	Retained Earnings		$42,100
	Retained Earnings	$18,900
	Dividends		$18,900