A company had service 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 balance in the income summary account before it is closed for the period?
A)$250,000
B)$45,500
C)$204,500
D)$222,400
E)$232,100

Question

Quizplus · Accepted Answer

To calculate the balance in the income summary account before it is closed, we need to subtract all the expenses and dividends from the service revenue and add the beginning balance in retained earnings.

$250,000 (service revenue) 
- $10,000 (rent expense) 
- $3,500 (utility expense) 
- $18,500 (salary expense) 
- $9,000 (depreciation expense) 
- $4,500 (advertising expense) 
- $18,000 (dividends) 
+ $17,900 (beginning balance in retained earnings)

= $204,500

Therefore, the correct answer is C.

A Company Had Service Revenue of $250,000,rent Expense of $10,000,utility