E4-7:

(a)
Date Account title and explanation Ref. Debit Credit
Closing entries

July 31, Service Revenue 400 £ 64,000

2017 Rent Revenue 429 6,500
Income summary 350 £ 70,500
(To close Revenue account)

Income summary 350 74,300

Depreciation expense 711 3,700
Salaries and wages expense 726 55,700
Utilities expense 732 14,900
( To close Expense account)

Retained earnings 320 3,800

Income Summary (70500-74300) 350 3,800
(To close net loss to retained earnings)

Retained earnings 320 12,000

Dividends 332 12,000
(To close dividends to retained earnings)

(b)

Retained Earnings
No. 320
3,800 20,260
12,000
4460