Income Summary - what it is…
a temporary account used to close out all revenue & expense accounts at the end of an accounting period
Adjusting entries Nominal vs real accounts:
Real Accounts = Permanent (Balance Sheet); Nominal Accounts = Temporary (Income Statement)
do it 8: A year-end count of supplies and materials determined that we have used $6,934 worth during the year.
credit Supplies and Materials: 6,934
debit Supplies and Materials expense 6,934
Do it: An insurance policy, worth $6,600, was purchased on September 1st.
6600/12 = 550
550 x 4 = 2200
credit Prepaid Insurance 2200
debit Insurance expense 2200
Do it: Late arriving invoices were delivered; Car Expense of $1280, Telephone Expense of $165, Utilities Expense of $203, Wages Expense of $640
credit A/P 2288 (total)
debit rest in their own accounts individualy
Do it: $6,000 worth of Revenue - Advertising was mistakenly credited.
debit Revenue - Advertising 6000
credit Unearned revenue 6000
closing entry #1?
reveneu –closed to–> income Summary
closing entry #2?
expensesSSSSS —closed to –> Income summary
closing entry #3?
Income summary –closing to–> Capital
closing entry #4?
Drawings –closing to–> capital
how do you do closing entries in general?
white name of account then amount. they have to equal to 0
how to do straight line depreciation
purchased a truck for $64,000 on Jan 1. 2024. Truck could be used for 6 years, and be sold at that time for $11,200.
Therefore:
Estimated Annual Depreciation is
($64,000 – $11,200) / 6 = $8,800
The truck will depreciate $8,800 each year.
8.4 lesson
How to do Declining balance:
computer purchased for 22000 55% smt
hapara
begining, CCA rate, depreciation expense, ending underpreciated tax
8.4 lesson
how to: Declining balance with 50% rule
1 only take 50% of it and do the stuff
8.4 lesson
