Exercise 6.6 Closing entries. LO 6-1 The ledger accounts of AXX Internet Company appear as follows on March 31, 2019: ACCOUNT NO. ACCOUNT BALANCE 101 Cash $ 71,000 111 Accounts Receivable 57,920 121 Supplies 9,700 131 Prepaid Insurance 24,100 141 Equipment 109,000 142 Accumulated Depreciation—Equipment 40,420 202 Accounts Payable 12,100 301 Aretha Hinkle, Capital 121,000 302 Aretha Hinkle, Drawing 12,100 401 Fees Income 349,260 510 Depreciation Expense—Equipment 20,260 511 Insurance Expense 10,500 514 Rent Expense 32,100 517 Salaries Expense 157,000 518 Supplies Expense 4,700 519 Telephone Expense 5,900 523 Utilities Expense 8,500 All accounts have normal balances. Required: Prepare the closing entries. Post the transactions in to the appropriate ledger accounts. Hint: Be sure to enter beginning balances.

Explanation:

March 31, 2019

Dr Fee income 249,260

Cr Income summary 249,260

March 31, 2019

Dr Income Summary 238,960

Cr Depreciation exp.-Equipment 20,260

Cr Insurance expense 10,500

Cr Rent expense 32,100

Cr Salaries expense 157,000

Cr Supplies expense 4,700

Cr Telephone expense 5,900

Cr Utilities expense 8,500

March 31, 2019

Dr Income Summary 10,300 [249,260-238,960]

Cr Retained earnings 10,300

March 31, 2019

Dr Aretha Hinkle, Capital 12,100

Cr Aretha Hinkle, Drawing 12,100

AXX Internet Company General Journal

Mar 31, 2019

Dr Fees Income$349,260

Cr Income Summary$349,260

Revenue account closed

Mar 31, 2019

Dr Income Summary 239,960

Cr Depreciation Expense-Equipment 20,260

Cr Insurance Expense 11,500

Cr Rent Expense 32,100

Cr Salaries Expense 157,000

Cr Supplies Expense 4,700

Cr Telephone Expenses 5,900

Cr Utilities Expense 8,500

All expenses account closed

Mar 31, 2019

Dr Income Summary 109,300

Cr Aretha Hinkle, Capital 109,300

Summary account to capital closed

Mar 31, 2019

Dr Aretha Hinkle, Capital 12,100

Cr Arehtha, Hinkle, Drawing 12,100

Drawing to owner's capital closed

Workings

1st Income summary is the addition of all the expenses which is 239,960

2nd Income summary

Fees income- the total addition of all expenses

349,260 - 239,960 = 109,300

c

explanation:

c because the item on a bank statement is also referred to as an account statement. in addition, it provides the beginning balance, ending balance, statement date, transaction date for each transaction, payee, customer name and address, statement period, the account holder's account number, and the bank's customer service number