Question

can you please show work and give me explanation for these answers

a s reprises com $7,000 $3,000 12. The income item for the month of June, 2011 of Camer the following information Revenues Expenses Salaries and Wages Expense Rent Expense Advertising Expense Supplies Expense Insurance Expense Total expenses Net income 100 The entry to close the revenue Account includes a debit to Income Summary for SIMO b. credit to Income Summary for $1.800 c. debit to Income Summary for $7.000 credit to Income Summary for $7.000 13. The entry to close the expense accounts includes a & debit to Income Summary for $1,800 b. credit to Rent Expense for $1,000 c. credit to Income Summary for $5,200. d. dcbit to Wages Expense for $3,000 14. After the revenue and expense accounts have been closed the balance in Income Summary will be b. a debit balance of $1,800 a credit balance of 51.800 da credit balance of $7.000 15. The entry to close Income S a y to Retained Famnings includes & a debit to Revenue for 57.000 b. credits to Expenses totalling 55,200 e a credit to Income Summary for $1,800 a credit to Retained amings for $1.500 d

Answer 1

12. Close entry is passed to make the revenue account balance Nil. From the Income Statement given above it can be seen that the revenue balance is credit. To nullify the account, the revenue accounts are debited and the Income summary account credited. The income summary account is a temporary account into which all income statement items (revenue and expenses) are transferred at the end of an accounting period by way of closing entries.
Correct answer is Option d.
Closing entry for revenue:
Revenue Account Dr.                                 7,000
       To Income Summary Account                            7,000

13. Similarly expense accounts are also transferred to the Income summary account. Since the account balance is debit, the Expense Account is credited and the Income Summary Account debited.

Closing Entry for expense:
Correct Answer is Option c.
Income Summary Account Dr.            5,200
     To Expense Account                                  5,200

14. The balance in Income Summary Account shall be $1,800 credit (Credit 7000 - Debit 5200). Therefore, the correct answer is Option c.

15. Entry to close Income Summary Account to Retained Earnings is :

Income Summary Account Dr.         1800
    To Retained Earnings Account               1,800
Correct answer is Option d.