Question

A company had revenue of $250,000, rent expense of $10,000, utility expense of $3,500, salary expense of $18,500, depreciation expense of $9,000, advertising expense of $4,500, dividends in the amount of $18,000, and a beginning balance in retained earnings of $17,900. What is the amount in the income summary account before it is closed for the period

Answer 1

Answer: $204,500

Explanation:

The amount in the income summary account before it is closed for the period will be calculated thus:

Revenue = $250,000

Less: Rent expense = $10,000

Less: Utility expense = $3,500

Less: Salary expense = $18,500

Less: Depreciation expense = $9,000

Less: Advertising expense = $4,500

Amount in Income summary account = $204,500