Presented below are selected account balances for Tamarisk Co. as of December 31, 2020. Inventory 12/31/20 $60,770
Cost of Goods Sold $229,017
Common Stock 74,170
Selling Expenses 16,133
Retained Earnings 45,080
Administrative Expenses 37,525
Dividends 17,873
Income Tax Expense 30,300
Sales Returns and Allowanes
11,908
Sales Discounts 15,070
Sales Revenue 408,750
Prepare closing entries for Tamarisk Co. on December 31, 2020.

Answer and Explanation:

The closing entries for the following accounts are presented below:

1. Sales Revenue A/c Dr $408,750

        To Income Summary $408,750

(Being revenue account closed)

2. Income summary A/c Dr $323,830

      To Cost of Goods Sold          $229,017

      To Sales Returns and Allowances $11,908

      To  Sales Discounts                        $15,070

      To Selling Expenses                       $16,133

      To Administrative Expenses          $37,525

      To Income Tax Expense                 $30,300

(Being expenses accounts are closed)

3. Income summary A/c Dr $84,930 ( $408,750 - $323,830)

       To Retained earning $84,930

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $17,873

         To Dividend A/c $17,873

(Being dividend account is closed)