Journalize the entry to transfer net income to retained earnings for Wedgewood Corporation if revenues for the most recent fiscal year were $2,100,000, expenses were $1,380,000, and dividends declared were $200,000.

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Business

Izabelle Macdonald

24 July, 09:53

Journalize the entry to transfer net income to retained earnings for Wedgewood Corporation if revenues for the most recent fiscal year were $2,100,000, expenses were $1,380,000, and dividends declared were $200,000.

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Max Mendoza · Answer 1

Debit Net Income $520,000

Credit Retained earnings $520,000

Being entries to transfer net income to retained earnings

Explanation:

This will be done by closing entries. Closing entries are journal entries made in a manual accounting system at the end of an accounting period to move the balances in temporary accounts to permanent accounts. The net income account is a temporary account while retained earnings account is the permanent account.

Given

Revenue = $2,100,000

Expenses = $1,380,000

Dividend declared = $200,000

Net income = $2,100,000 - $1,380,000 - $200,000

= $520,000

To journalize the entry to transfer net income to retained earnings for Wedgewood Corporation

Debit Net Income $520,000

Credit Retained earnings $520,000

Being entries to transfer net income to retained earnings