Question

Woods, Inc. earned revenues of $16,000 and incurred expenses of $5,500. The company declared and paid cash dividends of $2,000. What is the balance in the Income Summary account after closing net income or loss to the Retained Earnings account?
A. credit balance of $8,000.
B. balance of​ $0.
C. credit balance of $11,000.
D. debit balance of $19,000.

Answer 1

Based on Woods, Inc. revenue and expenses, the balance in the Income Summary Account would be B. balance of​ $0.

What would be the balance in the Income Summary Account?

There would be a credit of $16,000 from revenue. This would then be reduced by the debit of expenses to:

= 16,000 - 5,500

= $10,500

This $10,500 would then be credited to the Retained earnings account which would leave nothing in the Income summary account.

In conclusion, option B is correct.

Find out more on the Income account at brainly.com/question/24778422.