Closing Entries with Net Income After all revenue and expense accounts have been

Question

Closing Entries with Net Income

After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $490,750 and a credit of $613,400. At the same date, Darcy Lewis, Capital has a credit balance of $833,600, and Darcy Lewis, Drawing has a balance of $55,000.

a. Journalize the entries required to (1) close net income or net loss and (2) close the drawing account.

b. Determine the amount of Darcy Lewis Capital at the end of the period. $ ___________.

    

      

   

    

   

   .

.

   

   

   

a. Journalize the entries required to (1) close net income or net loss and (2) close the drawing account.

b. Determine the amount of Darcy Lewis Capital at the end of the period. $ ___________.

    

      

   

Explanation / Answer

a.

(1) close net income or net loss

Debit Income summary 122,650
Credit Darcy Lewis, Capital 122,650  

(2) close the drawing account.

Debit Darcy Lewis, Capital $55,000
Credit Darcy Lewis, Drawing $55,000

b. Determine the amount of Darcy Lewis, Capital at the end of the period.
Darcy Lewis, Capital Beg. bal. $833,600
Add: net income 122,650
Less: Drawing $55,000
= Ending bal. 901,250

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.