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The following information is from the Income Statement of the Cheyenne Laundry Service:


Revenues
Service Revenues $5720
Expenses
Salaries and wages expense $ 2160
Advertising expense 440
Rent expense 260
Supplies expense 180
Insurance expense 90
Total expenses 3130
Net income $2590

The entry to close the Income Summary includes a:

Respuesta :

Answer:

Credited to the retained earning accounts by $2,590

Explanation:

The net income is come by subtracting the total expenses from the revenue account.

In mathematically,

= Sales revenue - total expenses

The journal entry for closing the Income Summary is shown below:

Income summary A/c Dr $2,590

    To Retained earning A/c           $2,590

(Being income summary account is closed)

The net income amount would be added to the retained earning account by $2,590

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