The following information is available for Brendon Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Brendon, Capital? $$\begin{array} { | l | r | }
\hline \text { J. Brendon, Capital } & \$ 112,000 \
\hline \text { J. Brendon, Withdrawals } & 3 2 , 0 0 0 \
\hline \text { Fest earned } & 187,000 \
\hline \text { Depreciation Expense-Equipment } & 12,000 \
\hline \text { Wages expense } & 71,400 \
\hline \text { Interest expense } & 3 , 3 0 0 \
\hline \text { Insurance expense } & 11,700 \
\hline \text { Rent expense } & 24,200 \
\hline
\end{array}$$
A) $80,000.
B) $32,400.
C) $42,400.
D) $43,000.
E) $64,400.

Question

The following information is available for Brendon Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Brendon, Capital? $$\begin{array} { | l | r | } 
\hline \text { J. Brendon, Capital } & \$ 112,000 \
\hline \text { J. Brendon, Withdrawals } &  3 2 , 0 0 0  \
\hline \text { Fest earned } & 187,000 \
\hline \text { Depreciation Expense-Equipment } & 12,000 \
\hline \text { Wages expense } & 71,400 \
\hline \text { Interest expense } &  3 , 3 0 0 \
\hline \text { Insurance expense } & 11,700 \
\hline \text { Rent expense } & 24,200 \
\hline
\end{array}$$
A) $80,000.
B) $32,400.
C) $42,400.
D) $43,000.
E) $64,400.

Quizplus · Accepted Answer

The Income Summary account is closed to the Capital account with the net income amount. Net income is calculated as: Fees earned ($187,000) minus total expenses (Depreciation $12,000 + Wages $71,400 + Interest $3,300 + Insurance $11,700 + Rent $24,200) = $64,400.

The Following Information Is Available for Brendon Company Before Closing