Question

The following information is available for Brendon Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Retained earnings? Retained earnings $ 112,000 Dividends 32,000 Fees earned 187,000 Depreciation Expense—Equipment 12,000 Wages expense 71,400 Interest expense 3,300 Insurance expense 11,700 Rent expense 24,200

Answer 1

Answer:

$64,400

Explanation:

The amount of in the income summary that would be closed to retained earnings is the fees earned of $187,000 less the depreciation expense of $12,000,wages expense of $71,400,interest expense of $3,300,insurance expense of $11,700 as well as the rent expense of $24,200 as computed thus:

net income from income summary=$187,000-$12,000-$71,400-$3,300-$11,700-$24,200=$64400

Retained earnings closing balance=$112,000-$32,000+$64400 =$ 144,400.00