The ledger of Quentin Company contains the following balances: Quentin, Capital

Question

The ledger of Quentin Company contains the following balances: Quentin, Capital $31,120; Quentin, Drawing $1,680; Service Revenue $48,988; Salaries Expense $27,123; and Supplies Expense $3,145. Prepare the closing entries at December 31Debit: Income summary 30,268
Credit: Salaries expense 27,123
Credit: Suppplies expense 3,145

Debit: Service revenue 48,988
Credit: Income summary 48,988

Debit: Income summary 18,720                  <=   I don't understand how the Income summary/Quentin, capital is 18,720. Can anyone
Credit: Quentin, capitl 18,720                              explain? Thanks!

Debit: Quentin, capital 1,680
Credit: Quentin, Drawing 1,680

Explanation / Answer

This is the solution

Debit: Income summary 30,268
Credit: Salaries expense 27,123
Credit: Suppplies expense 3,145

Debit: Service revenue 48,988
Credit: Income summary 48,988

Debit: Income summary 18,720

18,720 = 48988-27123-3145 = 18720
Credit: Quentin, capitl 18,720

Debit: Quentin, capital 1,680
Credit: Quentin, Drawing 1,680

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