This document provides information about adjusting and closing entries for a partnership. It includes examples of adjusting entries for prepaid insurance, supplies inventory, and other expense accounts. It also discusses the income summary account and how it is closed out through a closing entry that credits revenue and debits expenses. Finally, it shows how closing entries are made for partners' capital accounts to record the net income or loss for the fiscal period and to close out the income summary account.

1. Accounting IAccounting I
Chapter 17 – Recording
Adjusting & Closing
Entries for a Partnership

2. ADJUSTING ENTRIES RECORDED IN A JOURNALADJUSTING ENTRIES RECORDED IN A JOURNAL
3. Account Debited
1. Heading 4. Debit
2. Date 5. Account Credited
6. Credit
5
2 1
3
6
4
Lesson 17-1, page 422Lesson 17-1, page 422

3. PARTIAL WORK SHEET SHOWING ADJUSTMENTSPARTIAL WORK SHEET SHOWING ADJUSTMENTS
Lesson 17-1, page 423Lesson 17-1, page 423

4. BEFORE ADJUSTMENTAFTER ADJUSTMENT
Bal. 270,480.00Bal. 270,480.00
ADJUSTING ENTRY FOR MERCHANDISE INVENTORYADJUSTING ENTRY FOR MERCHANDISE INVENTORY
Income Summary
(New Bal. 254,640.00)
Adj. (a) 15,840.00
Merchandise Inventory
Adj. (a) 15,840.00
Lesson 17-1, page 423Lesson 17-1, page 423

5. BEFORE ADJUSTMENTAFTER ADJUSTMENT
Bal. 6,480.00Bal. 6,480.00
Supplies Expense—Office
(New Bal. 1,750.00)
ADJUSTING ENTRY FOR OFFICE SUPPLIESADJUSTING ENTRY FOR OFFICE SUPPLIES
INVENTORYINVENTORY
Adj. (b) 4,730.00
Supplies Expense—Office
Adj. (b) 4,730.00
Lesson 17-1, page 424Lesson 17-1, page 424

6. BEFORE ADJUSTMENTAFTER ADJUSTMENT
Bal. 6,944.00Bal. 6,944.00
ADJUSTING ENTRY FOR STORE SUPPLIESADJUSTING ENTRY FOR STORE SUPPLIES
INVENTORYINVENTORY
Supplies Expense—Store
(New Bal. 3,034.00)
Adj. (c) 3,910.00
Supplies Expense—Store
Adj. (c) 3,910.00
Lesson 17-1, page 424Lesson 17-1, page 424

7. BEFORE ADJUSTMENTAFTER ADJUSTMENT
Bal. 5,800.00Bal. 5,800.00
Insurance Expense
(New Bal. 2,630.00)
ADJUSTING ENTRY FOR PREPAID INSURANCEADJUSTING ENTRY FOR PREPAID INSURANCE
Adj. (d) 3,170.00
Prepaid Insurance
Adj. (d) 3,170.00
Lesson 17-1, page 424Lesson 17-1, page 424

8. Work Together &Work Together &
On Your Own –On Your Own –
Page 425Page 425

9. Income Summary
THE INCOME SUMMARY ACCOUNTTHE INCOME SUMMARY ACCOUNT
Lesson 17-2, page 426Lesson 17-2, page 426
Debit
Total expenses
Credit
Revenue (greater than expenses)
(Credit balance is the net income.)

10. CLOSING ENTRY FOR AN INCOME STATEMENTCLOSING ENTRY FOR AN INCOME STATEMENT
ACCOUNT WITH A CREDIT BALANCEACCOUNT WITH A CREDIT BALANCE
1
2
3. Debit to Close
1. Heading
4. Credit
2. Date
3
4
Lesson 17-2, page 427Lesson 17-2, page 427

11. CLOSING ENTRY FOR INCOME STATEMENTCLOSING ENTRY FOR INCOME STATEMENT
ACCOUNTS WITH DEBIT BALANCESACCOUNTS WITH DEBIT BALANCES
4
2
3. Credit to Close
1. Date
4. Debit Total
2. Account Debited
1
3 3
Lesson 17-2, page 428Lesson 17-2, page 428

12. (New Bal. 69,615.85)
SUMMARY OF CLOSING ENTRY FOR INCOMESUMMARY OF CLOSING ENTRY FOR INCOME
STATEMENT ACCOUNTS WITH DEBIT BALANCESSTATEMENT ACCOUNTS WITH DEBIT BALANCES
Closing (costs and expenses) 337,664.15
Lesson 17-2, page 429Lesson 17-2, page 429
Income Summary
Bal. 189,960.00
Purchases
Bal. 6,600.00
Advertising Expense
Bal. 3,385.00
Credit Card Fee Expense
Bal. 3,170.00
Insurance Expense
Bal. 2,584.15
Miscellaneous Expense
Bal. 9,105.00
Payroll Taxes Expense
Bal. 21,000.00
Rent Expense
Bal. 89,400.00
Salary Expense
Bal. 4,730.00
Supplies Expense—Office
Bal. 3,910.00
Supplies Expense—Store
Bal. 3,820.00
Utilities Expense
Closing (revenue) 423,120.00Adj. (mdse. inv.) 15,840.00
(New Bal. zero)
Closing 189,960.00
(New Bal. zero)
Closing 6,600.00
(New Bal. zero)
Closing 3,385.00
(New Bal. zero)
Closing 3,170.00
(New Bal. zero)
Closing 2,584.15
(New Bal. zero)
Closing 9,105.00
(New Bal. zero)
Closing 21,000.00
(New Bal. zero)
Closing 89,400.00
(New Bal. zero)
Closing 4,730.00
(New Bal. zero)
Closing 3,910.00
(New Bal. zero)
Closing 3,820.00

13. Work Together &Work Together &
On Your Own –On Your Own –
Page 430Page 430

14. CLOSING ENTRY TO RECORD NET INCOME OR LOSSCLOSING ENTRY TO RECORD NET INCOME OR LOSS
AND CLOSE THE INCOME SUMMARY ACCOUNTAND CLOSE THE INCOME SUMMARY ACCOUNT
1
4
2
3. Debit to Close
1. Date
2. Account Debited
4. Accounts Credited
5. Credits to Record Net Income
3
Lesson 17-3, page 431Lesson 17-3, page 431
5

15. 5. Credits to
Record
Net
Income
CLOSING ENTRIES FOR THE PARTNERS’ DRAWINGCLOSING ENTRIES FOR THE PARTNERS’ DRAWING
ACCOUNTSACCOUNTS
1
4
2
3. Debit to
Close
1. Date
2. Account
Debited
4. Account
Credited
3
5
Lesson 17-3, page 432Lesson 17-3, page 432

16. COMPLETED CLOSING ENTRIES FOR ACOMPLETED CLOSING ENTRIES FOR A
PARTNERSHIP RECORDED IN A JOURNALPARTNERSHIP RECORDED IN A JOURNAL
Lesson 17-3, page 433Lesson 17-3, page 433

17. Work Together &Work Together &
On Your Own –On Your Own –
Page 434Page 434

18. POST-CLOSING TRIAL BALANCEPOST-CLOSING TRIAL BALANCE
1. Write the heading.
5
1
3
4
2
6 7
9
8
2. List accounts that
have balances.
3. Write debit balances.
4. Write credit balances.
5. Write the word Totals.
6. Total Debit column.
7. Total Credit column.
8. Verify equality of
totals.
9. Rule double lines.
Lesson 17-4, page 437Lesson 17-4, page 437

19. ACCOUNTING CYCLE FOR A MERCHANDISINGACCOUNTING CYCLE FOR A MERCHANDISING
BUSINESS ORGANIZES AS A PARTNERSHIP.BUSINESS ORGANIZES AS A PARTNERSHIP.
5
1
6
4
2
8
3
9
7
1. Source documents checked for accuracy,
and transactions are analyzed.
9. A post-closing trial
balance is prepared.
2. Transactions are recorded in a
journal.
3. Journal entries are posted to
ledgers.
4. Schedules of accounts
payable and accounts
receivable are prepared from
subsidiary ledgers.
5. Work sheet is prepared.
6. Financial statements are
prepared.
7. Adjusting and closing
entries are journalized.
8. Adjusting and closing
entries are posted.
Lesson 17-4, page 438Lesson 17-4, page 438

20. Work Together &Work Together &
On Your Own –On Your Own –
Page 439Page 439