Prepare the closing entries for the accounts

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Question - The trial balance of Luigi Fur Company at its year end of December 31 shows Cash $ 376,560; Merchandise Inventory $ 76,000; Luigi, Capital $ 420,000; Sales $ 365,500; Sales Discounts $ 1,990; Cost of Goods Sold $ 201,000; Rental Revenue $ 14,000; Freight Out $ 4,200; Rent Expense $ 14,750; Salaries Expense $ 45,000; and Luigi, Drawings $ 80,000. Luigi Fur Company's statement of owner's equity for the year showed profit of $ 112,560 and closing owner's capital of $ 452,560.

Required -

a) Prepare the closing entries for the above accounts.

b) Create T accounts for Income Summary and Luigi, Capital, and post the closing entries to these T accounts.

Reference no: EM133039337

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