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1. Preparation of Closing Entries and an Income Statement

   Round Grove Alarm Company provides security services to homes in northwestern Indiana. At year-end 2019, after adjusting entries have been made, the following list of account balances is prepared:

   Accounts Receivable	$36,800
   Accounts Payable	23,250
   Accumulated Depreciation, Equipment	124,000
   Common Stock	150,000
   Depreciation Expense, Equipment	45,300
   Dividends	5,600
   Equipment	409,500
   Income Taxes Expense	30,800
   Income Taxes Payable	24,300
   Interest Expense	4,800
   Notes Payable (due in 2022)	34,000
   Other Assets	7,700
   Prepaid Rent	4,750
   Rent Expense	27,600
   Retained Earnings, 12/31/2018	29,400
   Salaries Payable	12,600
   Salaries Expense	148,250
   Service Revenue	607,000
   Supplies Expense	51,900
   Supplies	12,700
   Utilities Expense	48,800
   Wages Expense	182,000
   Wages Payable	7,950

   Required:

   1. Prepare closing entries for Round Grove Alarm. If an amount box does not require an entry, leave it blank.

   Dec. 31	Income Summary Notes Payable Service Revenue Supplies Expense Utilities Expense
   	Accumulated Depreciation Income Summary Income Taxes Payable Prepaid Rent Service Revenue
   	(Close revenue account)
   Dec. 31	Equipment Income Summary Utilities Expense Wages Expense Wages Payable
   	Accumulated Depreciation, Equipment Depreciation Expense, Equipment Equipment Other Assets Retained Earnings
   	Income Summary Income Taxes Expense Income Taxes Payable Notes Payable Service Revenue
   	Accounts Payable Equipment Interest Expense Interest Payable Retained Earnings
   	Income Summary Prepaid Rent Rent Expense Retained Earnings Service Revenue
   	Accounts Receivable Income Summary Retained Earnings Salaries Expense Salaries Payable
   	Cash Common Stock Notes Payable Supplies Supplies Expense
   	Accounts Payable Income Summary Retained Earnings Service Revenue Utilities Expense
   	Cash Income Summary Service Revenue Wages Expense Wages Payable
   	(Close expense accounts)
   Dec. 31	Depreciation Expense, Equipment Dividends Income Summary Income Tax Expense Interest Expense
   	Common Stock Income Summary Notes Payable Retained Earnings Service Revenue
   	(Close Income Summary)
   Dec. 31	Depreciation Expense, Equipment Dividends Income Tax Expense Interest Expense Retained Earnings
   	Cash Dividends Income Summary Retained Earnings Service Revenue
   	(Close dividend account)

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   2. Prepare an income statement for Round Grove Alarm.

   Round Grove Alarm Company
   Income Statement
   For the Year Ended December 31, 2019
   Depreciation expense, equipment Income tax expense Rent expense Revenues Supplies expense		$
   Expenses:
   Interest payable Prepaid rent Revenues Wages expense Wages payable	$
   Cash Notes payable Retained earnings Salaries expense Salaries payable
   Accounts receivable Common stock Supplies Supplies expense Wages payable
   Accumulated depreciation, equipment Equipment Income summary Revenues Utilities expense
   Accumulated depreciation, equipment Depreciation expense, equipment Equipment Income summary Salaries payable
   Prepaid rent Rent expense Retained earnings Revenues Wages payable
   Accounts receivable Cash Common stock Interest expense Interest payable
   Accounts payable Income taxes expense Income taxes payable Notes payable Service revenue
   Net income Net loss		$

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