AC114 Unit 8 Closing Entries Problem Example

Course	AC114 Accounting I
Unit	Unit 8
Paper type	Closing entries problem
Length	About 580 words, 5 pages double-spaced
Format	APA 7 student paper
School	Purdue University Global
Program	BS in Accounting
Updated	October 2026

Free sample paper for AC114 Unit 8

Four Entries and a Clean Slate for July: A Unit 8 Closing Entries Problem for a Window-Cleaning Corporation

[Student Name]

Purdue University Global

AC114: Accounting I

Unit 8 Closing Entries Problem

[Instructor Name]

[Date]

Brightpane Window Care, Inc. and its June balances are composite; the textbook, framework and history of double entry cited are real.

What this part is doingStating the number of entries and the post-closing total in the lead shows the problem has been worked to its single right answer.

Which Accounts Close

Temporary accounts measure one period and must start the next at zero: Service Revenue, every expense account and Dividends. Permanent accounts carry their balances forward: assets, liabilities, Common Stock and Retained Earnings (Franklin et al., 2019). Income Summary is a temporary clearing account used only during closing.

Closing Entry 1: Revenue

June 30. Service Revenue, debit $8,280; Income Summary, credit $8,280. Closes the revenue earned in June into Income Summary.

Closing Entry 2: Expenses

June 30. Income Summary, debit $4,535. Credits: Salaries Expense $2,760; Supplies Expense $420; Fuel Expense $420; Utilities Expense $310; Depreciation Expense, Truck, $300; Insurance Expense $150; Depreciation Expense, Equipment, $100; Interest Expense $75. Closes all eight expense accounts. The credits total $4,535.

Closing Entry 3: Net Income

June 30. Income Summary, debit $3,745; Retained Earnings, credit $3,745. Moves June's net income into retained earnings.

Closing Entry 4: Dividends

June 30. Retained Earnings, debit $1,000; Dividends, credit $1,000. Closes dividends directly to retained earnings; they never pass through Income Summary because they are not an expense.

The Life of Income Summary

Income Summary opened at zero. Entry 1 credited it $8,280. Entry 2 debited it $4,535, leaving a credit balance of $3,745, which equals June's net income on the income statement. Entry 3 debited it $3,745, returning it to zero.

The credit balance left in Income Summary after the first two entries, $3,745, is the same figure as net income on the income statement, so the closing process doubles as one more check that the statements were prepared from the right balances.

What this part is doingThe highlighted sentence shows the closing entries tied to the income statement, which graders use to confirm the cycle is consistent.

Postings to Retained Earnings

June 30, credit $3,745 from Entry 3; June 30, debit $1,000 from Entry 4. Balance $2,745 credit, matching the statement of retained earnings.

Post-Closing Trial Balance

Brightpane Window Care, Inc. Post-Closing Trial Balance. June 30.

Listed by account number, with the side of each balance:

1. 101, debit 33,220; 112, debit 1,580; 126, debit 230; 130, debit 1,650; 157, debit 6,000; 167, debit 22,000. Debit total 64,680.

2. 158, credit 100; 168, credit 300; 201, credit 3,000; 209, credit 3,000; 212, credit 460; 230, credit 75; 250, credit 15,000; 311, credit 40,000; 320, credit 2,745. Credit total 64,680.

Only the fifteen permanent accounts remain, and every figure is in dollars.

Why the Post-Closing Total Differs From the Balance Sheet

The post-closing trial balance totals $64,680, while total assets on the balance sheet are $64,280. The $400 difference is the two accumulated depreciation accounts. On the balance sheet they are subtracted from assets; on a trial balance they are listed as credits, which adds them to the credit column instead.

Checks

1. No revenue, expense, dividend or Income Summary account appears on the post-closing trial balance.

2. Every temporary account now has a zero balance, ready for July.

3. Retained Earnings of $2,745 agrees with the statement of retained earnings.

4. Debits equal credits at $64,680.

Closing the nominal accounts at each period end is how double entry has always separated one period's results from the next (Sangster, 2016), and it lets July's revenue and expenses be measured from zero, which keeps each period's report comparable with the last (Financial Accounting Standards Board, 2018).

What this part is doingExplaining why the trial balance total differs from total assets anticipates a question graders often ask and shows real understanding of the layout.

References

Financial Accounting Standards Board. (2018). Conceptual framework for financial reporting: Chapter 1, The objective of general purpose financial reporting, and Chapter 3, Qualitative characteristics of useful financial information (Statement of Financial Accounting Concepts No. 8, as amended). https://www.fasb.org

Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 1: Financial accounting. OpenStax. https://openstax.org/details/books/principles-financial-accounting

Sangster, A. (2016). The genesis of double entry bookkeeping. The Accounting Review, 91(1), 299-315. https://doi.org/10.2308/accr-51115

What the AC114 Unit 8 assignment asks for

The eighth AC114 unit asks students to prepare closing entries, post them and present a post-closing trial balance. Identify the temporary accounts: revenue, every expense and dividends. Close revenue to Income Summary, close expenses to Income Summary, close the summary's balance to Retained Earnings, and close dividends directly to Retained Earnings. Post each entry so that every temporary account reaches zero. Show the balance of Income Summary at each step, since it should equal net income before its final entry. List what survives the reset, the permanent accounts alone, as a post-closing trial balance. Check that Retained Earnings matches the statement of retained earnings. Brief notes explaining the purpose of each entry help. Most closing problems fit on two pages; a cited textbook rule, in APA 7, strengthens any explanation.

Inside the AC114 Unit 8 example

The sample explains which accounts close and why. Entry 1 debits Service Revenue for $8,280. Entry 2 credits eight expense accounts totaling $4,535 from Income Summary. Entry 3 moves $3,745 to Retained Earnings, and entry 4 closes the dividend directly. A section follows Income Summary from zero through its $3,745 credit balance and back to zero. The highlighted sentence notes that this balance doubles as a check on net income. Retained Earnings postings end at $2,745. The post-closing trial balance is listed by account number, permanent accounts only, at $64,680. A section explains that the $400 difference from total assets is accumulated depreciation, and four checks close the problem.

Reading the AC114 Unit 8 grading rubric

Closing problems are graded on correct entries, correct postings and a post-closing trial balance that contains only permanent accounts. Each temporary account must reach zero. Closing dividends directly to Retained Earnings, not through Income Summary, is a frequent scoring point. The Income Summary balance should match net income, and graders may check it. Retained Earnings must agree with the statement of retained earnings. Including any revenue, expense or dividend account on the post-closing trial balance loses points. Brief explanations of each entry can earn credit. Neat layout and accurate totals, with APA 7 citations for any rule, finish the assessment.

AC114 Unit 8 help: mistakes that cost points

The most common closing error is running dividends through Income Summary, which leaves the summary's balance unequal to net income. Others close an expense with a debit, doubling it instead of clearing it. Contra accounts such as accumulated depreciation are closed by mistake. Income Summary is left with a balance. The post-closing trial balance includes temporary accounts. Retained Earnings is not updated for the dividend. Another slip is closing Income Summary before checking it against net income, which lets an error through unseen. With your June-end figures in hand, our team can draft the four entries, their postings and the final trial balance.

Get an AC114 Unit 8 example written to your instructions

Share the adjusted balances or statements your AC114 section is closing from, alongside the Unit 8 instructions and rubric, and the entries, postings and post-closing trial balance are built on those figures, with the net income check shown between the second and third entries. A first custom sample costs nothing and is returned in 24-48h. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.

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AC114 Unit 8 questions, answered

Why not close dividends through the income summary?

Because the summary account exists to measure net income, and dividends are not part of income. Routing them through it would leave the summary with a balance that no longer matches the income statement, and the third closing entry would move the wrong amount. Closing dividends directly to retained earnings keeps the income measurement clean and the entries easy to check.

Does the income summary account appear on the post-closing trial balance?

No. It is created and emptied during closing, so its balance is zero by the time the post-closing trial balance is prepared. If it appears with a balance, one of the four entries moved the wrong amount, most often because an expense was left out of the second entry or a revenue out of the first.

Which accounts should remain after closing?

Only the permanent ones: assets, liabilities and equity accounts such as common stock and retained earnings. Contra accounts belonging to those categories, accumulated depreciation especially, also remain because they carry forward. Revenues, expenses and dividends reset to zero so the next period starts measuring from nothing, which is the purpose of the whole step.

Where can I find a free AC114 Unit 8 sample paper?

You can read a complete AC114 Unit 8 closing entries problem here, with four closing entries for a window-cleaning corporation, the life of Income Summary and a post-closing trial balance.

Why is the AC114 Unit 8 post-closing total higher than total assets?

The post-closing trial balance lists accumulated depreciation of $400 as credits, while the balance sheet subtracts it from assets. That is why $64,680 appears instead of $64,280.