Question

Martinville Company earned revenues of $ 10,000 and incurred expenses of $ 5,000. Martinville withdrew $ 3,000 for personal use. What is the balance in the Income Summary account prior to closing net income or loss to the​ Martinville, Capital​ account?

Answer 1

Answer:  The balance in the Income Summary account prior to closing net income or loss to the​ Martinville, Capital​ account is $5,000(credit).

Explanation:

Given that,

Company earned revenues = $ 10,000

Incurred expenses = $ 5,000

Withdraw amount for personal use = $ 3,000

Balance in the Income Summary account:

= Earned revenue - Incurred expenses

= $ 10,000 - $ 5,000

= $5,000(credit)

∴ The balance in the Income Summary account prior to closing net income or loss to the​ Martinville, Capital​ account is $5,000(credit).