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On December 31, 2019, the ledger of Lopez Company contained the following account balances: Cash $ 66,000 Maria Lopez, Drawing $ 52,000 Accounts Receivable 5,800 Fees Income 107,500 Supplies 4,200 Depreciation Expense 5,500 Equipment 52,000 Salaries Expense 34,000 Accumulated Depreciation 5,000 Supplies Expense 6,000 Accounts Payable 6,000 Telephone Expense 5,200 Maria Lopez, Capital 121,500 Utilities Expense 9,300 Prepare the closing entries for the above transactions.

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Answer:

1. Dec 31, 2019

Dr Fees Income $107,500

Cr Income Summary $107,500

2. Dec 31, 2019

Dr Income summary 60,000

Cr Salaries expense 34,000

Cr Supplies expense 6,000

Cr Utilities expense 9,300

Cr Telephone expense 5200

Cr Depreciation expense 5500

3. Dec 31, 2019

Dr Income summary 47,500

Cr Retained earnings 47,500

4. Dec 31, 2019

Dr Maria lopez, capital 52,000

Cr Maria lopez, drawing 52,000

Explanation:

Preparation of the closing entries for the above transactions

1. Dec 31, 2019

Dr Fees Income $107,500

Cr Income Summary $107,500

(To close revenue account)

2. Dec 31, 2019

Dr Income summary 60,000

(5500+5200+9300+6000+34000)

Cr Salaries expense 34,000

Cr Supplies expense 6,000

Cr Utilities expense 9,300

Cr Telephone expense 5200

Cr Depreciation expense 5500

(To close expenses account)

3. Dec 31, 2019

Dr Income summary 47,500

($107,500-60,000)

Cr Retained earnings 47,500

(To close income summary account)

4. Dec 31, 2019

Dr Maria lopez, capital 52,000

Cr Maria lopez, drawing 52,000

(To close drawings account)

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