Answer:
1. $26,400
2. $34,400
Explanation:
The closing entry for the following accounts are shown below:
1. Service fees earned A/c Dr $70,000
Interest revenue A/c Dr $7,000
To Income Summary $
77,000
(Being revenue account closed)
2. Income summary A/c Dr $50,600
To Depreciation Expense $8,000
To Salaries Expense $38,000
To Utilities Expense $4,600
(Being expenses accounts are closed)
3. Income summary A/c Dr $26,400 ($77,000 - $50,600)
To K. Capri, Capital A/c $26,400
(Being the difference is credited to the capital account)
4. K.Capri capital $12,000
K.Capri withdrawals $12,000
(Being K.Capri withdrawals account is recorded)
Now the balance in the income summary is shown above i.e $26,400
And, the balance of the K. Capri, Capital account would be
= Credit balance + net income - withdrawals
= $20,000 + $26,400 - $12,000
= $34,400
