Primorsk is a global specialized staffing firm. Information adapted from the statement of earnings (in thousands, without
Question:
Revenues
Service revenues ................ $ 6,676,878
Interest income ................ 21,896
Total revenues ................. $ 6,698,774
Expenses
Employee compensation and benefits ......$ 3,930,780
Selling, general, and administrative expenses ... 1,983,646
Income taxes................. 308,608
Total expenses ................ $ 6,223,034
Net income.................. $ 475,740
Required
1. Prepare the closing entries Primorsk would have made on December 31, 2014. Treat income taxes as an expense and cash distributions to owners as withdrawals.
2. Based on your handling of requirement 1 and the effect of expenses and cash distributions on owner’s capital, what theoretical reason can you give for not including expenses and cash distributions in the same closing entry?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Principles of Accounting
ISBN: 978-1133626985
12th edition
Authors: Belverd E. Needles, Marian Powers and Susan V. Crosson
Question Posted: