Asked by Colin dunkley on Jun 04, 2024
Verified
The following information is available for Brendon Company before closing the accounts.What will be the amount in the Income Summary account that should be closed to Retained earnings? 
A) $80,000.
B) $64,400.
C) $43,000.
D) $32,400.
E) $42,400.
Income Summary
An account in the closing process that summarizes revenues and expenses for a period, transferring the net result to owner's equity.
Retained Earnings
The portion of a company's profits not distributed as dividends but reinvested in the business or kept as reserve.
- Understand the concept and application of closing accounts and their impact on the Income Summary and Retained Earnings.
Verified Answer
VA
Valeria AlpizarJun 09, 2024
Final Answer :
B
Explanation :
To find the amount to be closed to Retained Earnings, we need to calculate the total revenues minus the total expenses.
Total revenues = $180,000
Total expenses = $115,600
$180,000 - $115,600 = $64,400
Therefore, the correct answer is (B) $64,400.
Total revenues = $180,000
Total expenses = $115,600
$180,000 - $115,600 = $64,400
Therefore, the correct answer is (B) $64,400.
Learning Objectives
- Understand the concept and application of closing accounts and their impact on the Income Summary and Retained Earnings.