 Hello in this lecture we will complete the comprehensive problem by completing the closing process so up until this point We have done the adjusting journal entries. These are the transactions that happened during the month We did inform up a journal entry we then posted it to the general ledger and then that created the trial balance here Of course that was all through the month of May recording the transactions And we then did the adjusting process over here So we took the unadjusted trial balance from the prior tab We then made adjustments to it so that we had an adjusted trial balance that we could use to make the financial statements with Because it was on an accrual basis at that point then we took that adjusted trial balance and Created the financial statements. So here's that old Adjusted trial balance. Here's the financial statements in the form of balance sheet income statement Statement of owner's equity now this month We're assuming may has closed now and we want to think about the idea that These accounts that are temporary being the income statement and draws need to be closed out start over so that we can then Move into the next month and record the activity for the next month. So we're gonna go to the closing tab Here's the closing tab and we have our same information. We have the adjusted trial balance on this side That's where we're gonna start and we're gonna post our adjustments in this case our closing adjustments Until we get to the closing trial balance. What's our goal for the closing trial balance? it will be that the temporary accounts being the income statement and The draws need to go to zero basically and why would that be the case? Well, if we think about income when you say how much does someone earn you basically have to say What time frame are you talking about so if I asked you how much money do you make you have to assume? Well, what do you mean a year? Do you mean a month? Do you mean an hour? And that is the same for this income, which was earned last month And if we want to see how much we're gonna earn this month Then we need to make that go back to zero and start at the beginning of the month and count up from there So in theory, we're gonna do that by closing these out. Where are we gonna put it ultimately in the capital account? So you can think of the end process of this whole process is basically making all this accounts One number which is going to be 14 640 and putting it into the capital account So that basically all the blue numbers will be one number and that will be 56 940 which by the way if we go back to the trial balance on the financial statements, I should say That will be this 56 940 the Indian capital account. That will be this 56 940 so we're going to Create basically a trial balance that only has the balance sheet accounts in it All right, so we're gonna post these trial these journal entries They're all going to be as of the end of the month 531 now Obviously, we're gonna do this sometime after the end of the month But we want to post them as of the end of the month because clearly It is sometime in June right now because we had to close out all the journal entries We had to make the financial statements and whatnot and now we're doing the closing process at this time You'll also note that we made this new account called an income summary account we're going to use that account and Close this out in basically a four-step process for a couple reasons one It might be easier to see that the processes it'll make this journal entries shorter And it'll give us kind of a check figure to see if it's correct before we finish the closing process so in that process first we're going to close out the revenue account and Basically, what we want to do is make the revenue account zero. So I'm gonna make this a little larger here and so We're gonna do whatever we have to do to make that account zero It's got a credit balance in it of 36 800. How do we make something go down? We do the opposite thing to it as what it is so that has a credit in it Therefore we're going to debit it to make it go down because that's the opposite thing to it as what it is So I'm going to copy that we're going to put that right on top in C5 right here And it's going to be debit right click and paste it one two three just the values if you paste over here It'll paste format. We just want the values the amount will be this three six eight hundred Because that is what's in there. That's what we need to make it go to zero in this case We're gonna have only have one other account which will be a credit So I'm going to put that in there negative three six eight hundred I'm going to put it in the credit column but more importantly represent it with brackets and credits for the purposes of this Excel Worksheet and that net amount is going to go into our new account this income summary. So we're closing the Income into the income summary. I'm gonna copy that right-click copy. I'm gonna put that in C6 right-click and paste it one two three All right, then let's post this out and see if it does what we want it to do What do we want it to do have the revenue account go to zero all right, so we're going to put our cursor in I 18 Equals and then I'm just going to point to that I'm going to post this into that middle column and once we hit enter Let's see what happens takes this down to zero puts us out of balance Now we'll post the other side of it into the income summary in I 17 Equals and I'm going to point to this income summary. It's gonna take us from zero up to 36 so now we've closed out this number which we wanted to do and we just dumped it in the income summary just for a holding account as of now So make it next transaction will be as of 531 as well Of course, and now we need to close out the expense accounts note that all the other expense accounts are expense accounts So expense accounts are usually a lot of them, but they