After posting the entries to close all revenue and expense accounts,Marker Company's Income Summary account has a credit balance of $6,000,and its Dividends account has a debit balance of $2,500.These balances indicate that net income for the current accounting period amounted to $3,500.

Question

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The credit balance of $6,000 in the Income Summary account indicates the net income before dividends are distributed. The Dividends account does not affect the calculation of net income; therefore, the net income for the period is $6,000, not $3,500.

After Posting the Entries to Close All Revenue and Expense