Closing Entries Using T Accounts and Preparation of Financial Statements
The adjusted trial balance for Settles Tennis Club, Inc., at the end of the company’s fiscal year appears below.
Required
1. Prepare T accounts and enter the balances for Retained Earnings, Dividends,
Income Summary, and all revenue and expense accounts.
2. Enter the four required closing entries in the T accounts, labeling the components a, b, c, and d, as appropriate.
3. Prepare an income statement, a statement of retained earnings, and a balance sheet for Settles Tennis Club, Inc.
4. Explain why closing entries are necessary at the end of the accounting period.
