Problem
The following represents the adjusted trial balance of Delaney Tax Consultants as at 31st March 2022.
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Delaney Tax Consultants
Trial Balance
As at 31st March 2022
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|
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Debit $
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Credit $
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Cash at Bank
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35,000
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|
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Accounts Receivable
|
19,000
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|
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Office Supplies
|
8,000
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|
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Prepaid Insurance
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13,000
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|
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Office Equipment
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50,000
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|
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Accumulated Depreciation - Equipment
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25,000
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Accounts Payable
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18,000
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Wages Payable
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5,200
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Revenue received in advance
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10,400
|
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ABC Bank loan
|
|
9,000
|
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Capital - X. Delaney
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50,000
|
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Drawings - X. Delaney
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13,800
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|
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Consulting Revenue
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63,000
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Rent Revenue
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|
20,000
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Insurance Expense
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5,600
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|
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Rent Expense
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17,100
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|
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Wages Expense
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26,400
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|
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Depreciation Expense - Equipment
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12,700
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|
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Total
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200,600
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200,600
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Task
1. Prepare the closing journal entries for Delaney Tax Consulting as at 31st March 2022. Narrations ARE NOT required.
2. Prepare the T-account for Delaney Tax Consulting's profit and loss summary account and calculate the closing balance of the account as at 31st March 2022.
3. Discuss the purpose of closing entries. Include an explanation of which accounting concept is aligned with closing entries and the purpose of this concept.