Refer to E4-16.
E4-16
Mint Cleaning Inc. prepared the following unadjusted trial balance at the end of its second year of operations ending December 31, 2013. To simplify this exercise, the amounts given are in thousands of dollars.

Other data not yet recorded at December 31, 2013:
a. Insurance expired during 2013, $5.
b. Depreciation expense for 2013, $4.
c. Wages payable, $7.
d. Income tax expense, $9.
Required:
Using the adjusted balances in E4-16, give the closing journal entry for 2013. What is the purpose of "closing the books" at the end of the accounting period?

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Account Titles Cash Accounts Receivable Prepaid Insurance Debit Credit 5 38 6 80 Accumulated Depreciation Accounts Payable Contributed Capital 76 Sales Revenue Administrative Expenses Wages Expense 80 26 10 Totals