Reference no: EM132621305
Question - Presented below are selected account balances for C Company as of 12-31-xx:
Accounts receivable $ 400,000
Accounts payable $ 175,000
Retained earnings $4,100,000
Sales revenues $2,500,000
Gain on the sale of a stock investment $ 40,000
Loss on the sale of a bond investment $ 10,000
Cost of goods sold $ 600,000
Selling and administrative expenses $ 400,000
Interest expense $ 30,000
Income tax expense $ 300,000
Required -
a. Prepare the entry C should make to close out the temporary accounts. Do NOT use an "income summary" account - close the temporary accounts directly into retained earnings.
b. What is C's retained earnings balance AFTER making the closing entry?