Appendix I
Review Exercise Solutions
417
d) Journalize the closing entries using the income summary method
JOURNAL Page 1
Date
2016
Account Title and Explanation
Debit Credit
Dec 31 Sales Revenue
113,500
Interest Revenue
6,500
Inventory
33,440
Purchase Returns & Allowances
5,800
Purchase Discounts
3,200
Income Summary
162,440
Close revenue and credit accounts and
update inventory balance
Dec 31 Income Summary
122,070
Inventory
16,140
Sales Returns & Allowances
1,000
Sales Discounts
1,580
Purchases
70,000
Freight-In
1,000
Depreciation Expense
5,000
Insurance Expense
2,500
Interest Expense
2,600
Rent Expense
6,000
Salaries Expense
11,000
Supplies Expense
4,500
Utilities Expense
750
Close expense and debit accounts and
update inventory balance
Dec 31 Income Summary
40,370
Gregg, Capital
40,370
Close income summary
Dec 31 Gregg, Capital
5,000
Gregg, Drawings
5,000
Close drawings account
