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28 December, 20:28

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:

+5
Answers (1)
  1. 28 December, 23:20
    0
    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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