Closing entry steps (if net loss, skip step 3 & 4) 1. close revenues to income summary: close expense to income summary, subtotal income summary, calculate and record taxes, close income tax expenses to income summary, close income summary to retained earnings. Dr wip (foh)calculate (or take from cogm ) Used to show the net realizable value of a/r. Shd dr rent x, dr wip foh, dr prepaid rent, cr cash. Do dr wip foh dr prepaid rent cr rent expense. Dr prepaid ins (cash*(#of months unused/total months in policy) Finished goods (fg) inventory valuing the ending balance in wip. Same formula used for raw materials (cid:1832)(cid:1841)=(cid:1842)(cid:1870)(cid:1872) (cid:1842)(cid:1870)(cid:1867)(cid:1876)(cid:1877) (cid:1846)(cid:1867)(cid:1872) (cid:1842)(cid:1870)(cid:1867)(cid:1876)(cid:1877) (cid:1846)(cid:1867)(cid:1872) (cid:1832)(cid:1841) For assets with a finite life, cost is allocated over useful life shorter of: estimated useful life or the legal. Amortizable amount would be amortized equally over useful life for the intangible asset. If impairment is evident, write to recoverable amt. When a carrying amount exceeds its recoverable amount.