The following balances appear on the books of Sarah Simon Enterprises:

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S4-5 Posting closing entries directly to T-accounts [5 min]
It is December 31 and time for your business to close the books. The following balances
appear on the books of Sarah Simon Enterprises:

a. Drawing, $8,500.
b. Service revenue, $23,700.
c. Expense account balances: Salary, $6,100; Rent, $4,000; Advertising, $3,300.

Requirements

1. Set up each T-account given and insert its adjusted balance as given (denote as
Bal) at December 31. Also set up a T-account for Simon, capital, $26,100, and
for Income summary.

2. Post the closing entries to the accounts, denoting posted amounts as Clo.

3. Compute the ending balance of Simon, capital.