Use this end-of-period spreadsheet to answer the questions that follow. Account

Question

Use this end-of-period spreadsheet to answer the questions that follow.

Account Title

The entry to close Income Summary would be

a.debit Common Stock, $9,000; credit Income Summary, $9,000

b.debit Common Stock, $50,000; credit Income Summary, $50,000

c.debit Income Summary, $50,000; credit Retained Earnings, $50,000

d.debit Income Summary, $155,000; credit Common Stock, $155,000

Finley Company
End-of-Period Spreadsheet
For the Year Ended December 31 ??
Adjusted Trial Balance Income Statement Balance Sheet

Account Title

Debit Credit Debit Credit Debit Credit Cash 48,000 48,000 Accounts Receivable 18,000 18,000 Supplies 6,000 6,000 Equipment 57,000 57,000 Accumulated Depr. 18,000 18,000 Accounts Payable 25,000 25,000 Wages Payable 6,000 6,000 Common Stock 30,000 30,000 Retained Earnings 3,000 3,000 Dividends 3,000 3,000 Fees Earned 155,000 155,000 Wages Expense 63,000 63,000 Rent Expense 27,000 27,000 Depreciation Expense 15,000 15,000 Totals 237,000 237,000 105,000 155,000 132,000 82,000 Net Income (Loss) 50,000       50,000 155,000 155,000 132,000 132,000

Explanation / Answer

The entry to close income summary would be :

Income summary net balance it means net income is $50000

So Retained earnings is credit by $50000 and income summary is debit by $50000

So answer is c) debit Income Summary, $50,000; credit Retained Earnings, $50,000

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