Question

The Income Summary account, for Wise Tools appears below. Based on the data contained in the account, determine which of the statements below is correct. Income Summary Debit Credit 12/31 beginning inventory 4,000 12/31 ending inventory 9,000 12/31 expenses 51,000 12/31 revenues 45,000 Multiple Choice Wise Tools will report a $6,000 net loss for the period ending 12/31 Wise Tools will report net income of $6,000 for the period ending 12/31 Wise Tools will report net income of $1,000 for the period ending 12/31 Wise Tools will report a $1,000 net loss for the period ending 12/31

Answer 1

Answer:

Wise Tools will report a $1,000 net loss for the period ending 12/31.

Explanation:

Calculation to determine which of the statements about Wise Tools is correct

Revenues $45,000

Less Expenses ($51,000)

Less Beginning Inventory ($4,000)

Add Ending inventory $9,000

Ending Net Loss -$1,000

Therefore the correct statements Wise Tools is:

Wise Tools will report a $1,000 net loss for the period ending 12/31.