Expert: Ed McFarland - 2/18/2006

Question
I have a homework problem which I am having troubling working out.

Prepare the closing entries from the following accounts adapted from the records Sprint Corp. at 12/31/20X2 (amts. in millions):

Service revenue $23,613
Notes payable $17,514
Depreication $4,144
Other revenue $675
Dividends $476
Income tax expense $126
Interest expense $990
Income tax payable $440
Unearned revenues $607
Cost of services old $11,620
Accumulated depreciation $17,799
Selling, general, and adm. expense $6,919
Other expense $396
Retained earnings, 12/31/20X2 $1,961

How much net income did Sprint earn during the period?
Prepare a t-acount for retained earnings to show the 12/31/20X2.
What caused retained earnings to decrease during 20X2

My quesiton is how do i prepare a t-account for this entry.  I know im supposed to seperate the entries into dividends, retained earnings and expenses but my answer does not come out to the ones in the book.

Answer
Since you didn't tell me what you got for an answer or what the prior year numbers are, it is hard to tell you to go look for your difference.

A clue that you have something going the wrong way is look at the difference divide it by 2 and it should point at something, if that is what you have done wrong.

Good luck.