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The PeltonMarketing Research Company, owned by Lou Pelton, is employed by large companies to test...

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Accounting

The PeltonMarketing Research Company, owned by Lou Pelton, is employed by large companies to test consumer reaction to new products. On January 31 the firm's worksheet showed the following data: (a) supplies used, $560; (b) expired rent $3,000; and (c) depreciation on office equipment of $1,120. The balances of the revenue and expense accounts listed in the Income Statement of the worksheet and the drawing account listed in the Balance Sheet section of the worksheet are given below.

REVENUE AND EXPENSE ACCOUNTS

401 Fees Income$77,000 Cr.

511 Depr. Expense - Office Equipment1,120 Dr.

514 Rent Expense3,000 Dr.

517 Salaries Expense41,200 Dr.

520 Supplies Expense560 Dr.

523 Telephone Expense940 Dr.

526Travel Expense8,920 Dr.

529Utilities Expense460 Dr.

DRAWING ACCOUNT

302 Lou Pelton, Drawing4,800 Dr.

INSTRUCTIONS (Use the space below)

1. Record the adjusting entries in the general journal.

2. Record the closing entries in the general journal.

Analyze: What closing entry is required to close a drawing account?

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