Ask Question
10 June, 16:30

Dogwood, Inc. earned revenues of $11,000 and incurred expenses of $7,500. The company declared and paid cash dividends of $2,000. What is the balance in the Income Summary account prior to closing net income or loss to the Retained Earnings account?

A. credit balance of $3,500

B. credit balance of $11,000

C. debit balance of $3,500

D. debit balance of $1,500

+2
Answers (1)
  1. 10 June, 19:54
    0
    A) credit balance of $3,500

    Explanation:

    Expenses are closed by:

    Dr Income summary 7,500

    Cr Expenses 7,500

    Revenues are closed by:

    Dr Revenues 11,000

    Cr Income statement 11,000

    the balance before closing income summary = 11,000 (credit) - 7,500 (debit) = 3,500 (credit)

    finally, the account is closed by:

    Dr Income statement 3,500

    Cr Retained earnings 3,500
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Dogwood, Inc. earned revenues of $11,000 and incurred expenses of $7,500. The company declared and paid cash dividends of $2,000. What is ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers