after the accounts have been adjusted at june 30, the end of the fiscal year, the following balances were…

after the accounts have been adjusted at june 30, the end of the fiscal year, the following balances were taken from the ledger of classic landscaping co.:\nretained earnings $1,100,000\ndividends 30,000\nfees earned 975,000\nwages expense 580,000\nrent expense 120,000\nsupplies expense 31,600\nmiscellaneous expense 12,400\n\njournalize the two entries required to close the accounts. if an amount box does not require an entry, leave it blank.\njune 30

after the accounts have been adjusted at june 30, the end of the fiscal year, the following balances were taken from the ledger of classic landscaping co.:\nretained earnings $1,100,000\ndividends 30,000\nfees earned 975,000\nwages expense 580,000\nrent expense 120,000\nsupplies expense 31,600\nmiscellaneous expense 12,400\n\njournalize the two entries required to close the accounts. if an amount box does not require an entry, leave it blank.\njune 30

Answer

Explanation:

Step1: Close revenue account

We need to transfer the balance of the Fees Earned account to the Income Summary account. The balance of Fees Earned is $975,000. Debit: Fees Earned $975,000 Credit: Income Summary $975,000

Step2: Close expense accounts

First, calculate the total of all expense accounts: $580,000 (Wages Expense)+$120,000 (Rent Expense)+$31,600 (Supplies Expense)+$12,400 (Miscellaneous Expense) = $744,000. Then transfer the total expense to the Income Summary account. Debit: Income Summary $744,000 Credit: Wages Expense $580,000 Credit: Rent Expense $120,000 Credit: Supplies Expense $31,600 Credit: Miscellaneous Expense $12,400

Step3: Close Income Summary account

The net income is the difference between revenues and expenses. Net income = $975,000 - $744,000=$231,000. Transfer this amount from Income Summary to Retained Earnings. Debit: Income Summary $231,000 Credit: Retained Earnings $231,000

Step4: Close Dividends account

Transfer the Dividends balance to Retained Earnings. Debit: Retained Earnings $30,000 Credit: Dividends $30,000

The journal - entries are:

Date Account Title Debit Credit
June 30 Fees Earned $975,000
Income Summary $975,000
June 30 Income Summary $744,000
Wages Expense $580,000
Rent Expense $120,000
Supplies Expense $31,600
Miscellaneous Expense $12,400
June 30 Income Summary $231,000
Retained Earnings $231,000
June 30 Retained Earnings $30,000
Dividends $30,000

Answer:

Date Account Title Debit Credit
June 30 Fees Earned $975,000
Income Summary $975,000
June 30 Income Summary $744,000
Wages Expense $580,000
Rent Expense $120,000
Supplies Expense $31,600
Miscellaneous Expense $12,400
June 30 Income Summary $231,000
Retained Earnings $231,000
June 30 Retained Earnings $30,000
Dividends $30,000