E4-22 Closing Process
A partial adjusted trial balance is shown as follows for Shockley Contracting:
Partial Adjusted Trial Balance
Retained earnings 17,450
Service revenue 30,600
Advertising expense 1,450
Depreciation expense 9,650
Interest expense 810
Salaries expense 7,600
Supplies expense 1,100
Utilities expense 2,330
a. Prepare Shockley’s income statement and a statement of retained earnings for the month of June. List the accounts in chart of accounts order.
b. Prepare the appropriate closing entries at June 30. When more than one debit or credit, list the accounts in chart of accounts order.
For compound transaction, if an amount box does not require an entry, leave it blank or enter “0”.
c. What is the purpose of “closing the books” at the end of an accounting period?