Task: Closing Entries
The income statement for Quality Plumbing, Inc., for the year ended December 31, 2006, is as follows:
Quality Plumbing, Inc.
Income Statement
For the Year Ended December 31, 2006
Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $623,400
Less expenses:
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $447,000
Wages expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,350
Utilities expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,720
Insurance expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,790
Property tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,110
Rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,000
Advertising expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,830
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,300
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 592,100
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 31,300
Dividends of $23,200 were paid on December 30, 2006.
Required:
1. Give the entry required on December 31, 2006, to properly close the income statement accounts.
2. Give the entry required to close the dividends account at December 31, 2006.