Ocean Life Boat Supply uses the periodic inventory method. The adjusted trial balance of Ocean Life Boat Supply at December 31, 2018, follows:

Requirements
1. Journalize the required closing entries at December 31, 2018. Assume ending Merchandise Inventory is $54,300.
2. Set up T-accounts for Income Summary; Retained Earnings; and Dividends. Post the closing entries to the T-accounts, and calculate their ending balances.
3. How much was Ocean Life's net income or net loss?

Transcribed Image Text:

OCEAN LIFE BOAT SUPPLY Adjusted Trial Balance December 31, 2018 Balance Credit Account Title Debit $ 4,200 Cash Accounts Receivable 15,100 Merchandise Inventory (beginning) 44,500 8,300 Office Supplies Equipment 59,300 $ 19,800 Accumulated Depreciation-Equipment Accounts Payable 12,600 Salaries Payable 1,600 Notes Payable, long-term 11,100 Common Stock 25,000 Retained Earnings 34,100 Dividends 60,600 Sales Revenue 315,800 Interest Revenue 3,400 Purchases 274,500 94,600 Purchase Returns and Allowances Purchase Discounts 9,000 Selling Expense 38,600 Administrative Expense 21,900 $ 527,000 $ 527,000 Total