Finley Company Worksheet For the Year Ended December 31, 2010 Adjusted Trial Bal

Question

Finley Company Worksheet For the Year Ended December 31, 2010 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-Equip 18,000 18,000 Accounts Payable 30,000 30,000 Wages Payable 6,000 6,000 Capital Stock 4,000 4,000 Retained Earnings 29,000 29,000 Dividends 3,000 3,000 Fees Earned 141,000 141,000 Wages Expense 63,000 63,000 Rent Expense 18,000 18,000 Depreciation Expense 15,000 15,000 Totals 228,000 228,000 96,000 141,000 132,000 87,000 Net Income (Loss) 45,000 45,000 141,000 141,000 132,000 132,000

Based on the preceding trial balance, the entry to close income summary would be:

1. debit Income Summary $141,000; credit Retained Earnings $141,000

2. debit Retained Earnings $45,000; credit Income Summary $45,000

3. debit Income Summary $45,000, credit Retained Earnings $45,000

4. debit Retained Earnings $9,000; credit Income Summary $9,000

Explanation / Answer

3. debit Income Summary $45,000, credit Retained Earnings $45,000

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