Question

the companys adjusted trial balance as follows includes the following accounts balances: cash, $15,000; equipment, $85,000; accumulated depreciation, $25,000; accounts payable, $10,000; retained earnings, $59,000; dividends, $2,000; fees earned, $56,000; depreciation expense, note: enter debits before credits. date december 31 general journal fees revenue income summary debit 56,000 credit 56,000

Explanation:

Step1: Close expense account

Debit Income Summary, credit Depreciation Expense.
$$\text{Income Summary (Debit)} = \$25,000; \text{Depreciation Expense (Credit)} = \$25,000$$

Step2: Close income summary to retained earnings

Calculate net income: $\$56,000 - \$25,000 = \$31,000$. Debit Income Summary, credit Retained Earnings.
$$\text{Income Summary (Debit)} = \$31,000; \text{Retained Earnings (Credit)} = \$31,000$$

Step3: Close dividends to retained earnings

Debit Retained Earnings, credit Dividends.
$$\text{Retained Earnings (Debit)} = \$2,000; \text{Dividends (Credit)} = \$2,000$$

Answer:

Date	General Journal	Debit	Credit
	Income summary		56,000
December 31	Income summary	25,000
	Depreciation Expense		25,000
December 31	Income summary	31,000
	Retained earnings		31,000
December 31	Retained earnings	2,000
	Dividends		2,000