Response to the following questions:
1. The ledger of Avril Company includes the following accounts with normal balances: L. Avril, Capital $6,000; L. Avril, Withdrawals $400; Services Revenue $10,000; Wages Expense $5,200; and Rent Expense $800. Prepare the necessary closing entries from the available information at December 31.
2. Answer each of the following questions related to international accounting standards.
a. Explain how the closing process is different between accounting under IFRS versus U.S. GAAP.
b. What basic principle do U.S. GAAP and IFRS rely upon in recording the initial acquisition value for nearly all assets?