The following account balances were taken from Cal Tour Corporation's year-end adjusted trial balance (assume these are the company's only lemporary accounts): Dividends __ 600 Service revenue __ 19,8010 Supplies expense __ 525 Rent expense __ 3,660 Depreciation expense: equipment __ 1,200 Salaries expense __ 12,70 to Income taxes expense __ 615 Prepare the company's necessary closing entries.

To prepare the necessary closing entries for Cal Tour Corporation, we need to close out all temporary accounts (revenues, expenses, and dividends) to prepare for the next accounting period. The temporary accounts will be closed to Income Summary, and then Income Summary will be closed to Retained Earnings.<br /><br />Here are the steps to prepare the closing entries:<br /><br />1. Close the revenue accounts to Income Summary.<br />2. Close the expense accounts to Income Summary.<br />3. Close the Income Summary account to Retained Earnings.<br />4. Close the Dividends account to Retained Earnings.<br /><br />Let's prepare the closing entries:<br /><br />**Closing the Revenue Accounts:**<br />Service Revenue is the only revenue account provided.<br /><br />```<br />Date: December 31<br /> Debit: Service Revenue $19,810<br /> Credit: Income Summary $19,810<br />(To close the Service Revenue account to Income Summary)<br />```<br /><br />**Closing the Expense Accounts:**<br />Supplies Expense, Rent Expense, Depreciation Expense, Salaries Expense, and Income Taxes Expense are the expense accounts provided.<br /><br />```<br />Date: December 31<br /> Debit: Income Summary $17,195<br /> Credit: Supplies Expense $525<br /> Credit: Rent Expense $3,660<br /> Credit: Depreciation Expense $1,200<br /> Credit: Salaries Expense $12,710<br /> Credit: Income Taxes Expense $615<br />(To close the expense accounts to Income Summary)<br />```<br /><br />**Closing the Income Summary Account to Retained Earnings:**<br />The balance in the Income Summary account represents the net income or loss for the period. Since we don't have the beginning balance in Retained Earnings, we'll assume it's zero for simplicity. The net income is calculated as follows:<br /><br />```<br />Net Income = Service Revenue - (Supplies Expense + Rent Expense + Depreciation Expense + Salaries Expense + Income Taxes Expense)<br />Net Income = $19,810 - ($525 + $3,660 + $1,200 + $12,710 + $615)<br />Net Income = $1,816<br />```<br /><br />Now, close the Income Summary account to Retained Earnings:<br /><br />```<br />Date: December 31<br /> Debit: Income Summary $1,816<br /> Credit: Retained Earnings $1,816<br />(To close the Income Summary account to Retained Earnings)<br />```<br /><br />**Closing the Dividends Account to Retained Earnings:**<br /><br />```<br />Date: December 31<br /> Debit: Retained Earnings $600<br /> Credit: Dividends $600<br />(To close the Dividends account to Retained Earnings)<br />```<br /><br />These entries ensure that all temporary accounts are closed and the net income or loss for the period is transferred to Retained Earnings.