Using the information from the Adjusted Trial Balance, journalize the closing entries for the end of the month.

Question

SMART TOUCH LEARNING
Adjusted Trial Balance
December 31, 2016
Balance
Account Title Debit Credit
Cash 20,900
Accounts Receivable 11,500
Office Supplies 200
Prepaid Rent 13,900
Furniture 24,400
Accumulated Depreciation--Furniture 8,300
Accounts Payable 2,700
Salaries Payable 600
Interest Payable 400
Unearned Revenue 6,900
Notes Payable 9,700
Common Stock 13,600
Retained Earnings 13,900
Dividends 35,500
Service Revenue 63,400
Depreciation Expense--Furniture 2,700
Interest Expense 400
Rent Expense 4,100
Salaries Expense 4,800
Supplies Expense 1,100
Total 119,500 119,500
Date
Accounts and Explanation
Debit
Credit

Dec. 31
correct
service revenue
correct
63400
correct
correct
income summary
correct
correct
63400
correct

To close Revenue
correct
Date
Accounts and Explanation
Debit
Credit

Dec. 31
correct
income summary
correct
13100
correct
correct
salaries expense
correct
correct
4800
correct
rent expense
correct
correct
4100
correct
interest expense
correct
correct
400
correct
supplies expense
correct
correct
1100
correct
depreciation expense--furniture
correct
correct
2700
correct

To close Expenses
correct
Date
Accounts and Explanation
Debit
Credit

Dec. 31
correct
income summary
correct
50300
correct
correct
retained earnings
correct
correct
50300
correct

To close Income Summary
correct
Date
Accounts and Explanation
Debit
Credit

Dec. 31

To close Dividends

Answer 1

To complete the closing entries for Smart Touch Learning for the end of December 31, 2016, we will journalize the entries to close the revenue, expenses, income summary, and dividends. Below are the closing entries:

Journal Entries for Closing:

1. Closing Revenue to Income Summary

Date: Dec. 31, 2016
Account Title:

• Debit: Service Revenue $63,400
• Credit: Income Summary $63,400

Dec. 31
   Income Summary                63,400  
      Service Revenue                       63,400  
   (To close revenue accounts)

---

2. Closing Expenses to Income Summary

Date: Dec. 31, 2016
Account Title:

• Debit: Income Summary $50,300
• Credit: Salaries Expense $4,800
• Credit: Rent Expense $4,100
• Credit: Interest Expense $400
• Credit: Supplies Expense $1,100
• Credit: Depreciation Expense—Furniture $2,700

Dec. 31
   Income Summary                50,300  
      Salaries Expense                     4,800  
      Rent Expense                         4,100  
      Interest Expense                       400  
      Supplies Expense                     1,100  
      Depreciation Expense—Furniture       2,700  
   (To close expense accounts)

---

3. Closing Income Summary to Retained Earnings

Date: Dec. 31, 2016
Account Title:

• Debit: Income Summary $13,100
• Credit: Retained Earnings $13,100

Dec. 31
   Retained Earnings              13,100  
      Income Summary                      13,100  
   (To close income summary to retained earnings)

---

4. Closing Dividends to Retained Earnings

Date: Dec. 31, 2016
Account Title:

• Debit: Retained Earnings $35,500
• Credit: Dividends $35,500

Dec. 31
   Retained Earnings              35,500  
      Dividends                              35,500  
   (To close dividends to retained earnings)

Summary of Closing Entries:

1. Close the revenue account to the Income Summary.
2. Close all expense accounts to the Income Summary.
3. Close the Income Summary to Retained Earnings.
4. Close the Dividends account to Retained Earnings.

Remember to follow proper accounting procedures and ensure that each closing entry is supported by appropriate documentation.