Prepare closing journal entries for Armour Company for the year ended December 31. Data for the closing entries are as follows:

Explanation
The general journal is the book where entries are initially made relating to financial transactions entered into by the company.

The first journal entry is a debit to income summary and a credit to factory overhead and its subsidiary ledgers of $186,250 to transfer the debit balance to income summary and close the subsidiary factory overhead accounts.

The second journal entry is a debit to factory overhead and a credit to income summary of $186,250 to transfer the credit balance to income summary and close the factory overhead account.

The third journal entry is a debit to sales of $930,600 and to interest revenue of $920, and a credit to income summary of $931,520 to transfer the credit balance to income summary and close the revenue accounts.

The fourth journal entry is a debit to income summary of $886,865, and a credit to cost of goods sold of $710,500, salaries expense of $98,100, office supplies expense of $3,500, depreciation expense-office equipment of $6,130, utilities expense-office of $7,460, bad debts expense of $2,275, advertising expense of $9,250, interest expense of $8,300 and income tax expense of $41,350 to transfer the debit balance to income summary and close the remaining expense accounts.

The fifth journal entry is a debit to income summary, and a credit to retained earnings of $44,655 for the balance of income summary transferred and closed to retained earnings.