Closing Entries
Royston Realty reported the following accounts on its income statement:
|
Commissions Earned
|
$54,000
|
Travel and Entertainment
|
$4,500
|
|
Real Estate Board Fees Paid
|
5,000
|
Insurance Expired
|
780
|
|
Computer Line Charge
|
864
|
Advertising Expense
|
1,460
|
|
Depreciation on Computer
|
450
|
Office Supplies Used
|
940
|
|
Car Expenses
|
2,200
|
|
|
|
Required
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|
|
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1. Prepare the necessary entries to close the temporary accounts.
2. Explain why the closing entries are necessary and when they should be recorded.