The year-end adjusted trial balance of the Timmons Tool and Die Corporation incl

Question

The year-end adjusted trial balance of the Timmons Tool and Die Corporation included the following account balances: retained earnings, $320,000; sales revenue, $990,000; cost of goods sold, $690,000; salaries expense, $160,000; rent expense, $49,000; and interest expense, $23,000.

Can you help me find the income summary? it is not 300,000

Event General Journal Debit Credit 1 Sales revenue 990,000 Income summary 990,000 2 Income summary XXXX Salaries expense 160,000 Rent expense 49,000 Interest expense 23,000 3 Income summary 68,000 Retained earnings 68,000

Explanation / Answer

All expenses are credited to the income summary account. So, the closing entry of expenses is as follows:

Therefore, the balance in the income summary is $990,000 - $922,000=$68,000.

Date Entry Debit Credit Income summary a/c Dr $922,000.00 To Cost of goods sold a/c Cr $690,000.00 To Salaries expense a/c Cr $160,000.00 To Rent expense a/c Cr $49,000.00 To interest expense a/c Cr $23,000.00 (Being expenses closed to income summary account)

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