The owner's Capital, Withdrawals, and Income Summary accounts for Laurel Repair Company for the accounting period are presented below in T account form after the recording and posting of closing entries: The total amount of expenses for the period is
A) $200.
B) $400.
C) $900.
D) $500.

Question

The owner's Capital, Withdrawals, and Income Summary accounts for Laurel Repair Company for the accounting period are presented below in T account form after the recording and posting of closing entries:  The total amount of expenses for the period is
A) $200. 
B) $400. 
C) $900. 
D) $500.

Quizplus · Accepted Answer

The expenses for the period can be calculated by subtracting the beginning balance of Income Summary account from the ending balance of Income Summary account. 
Ending balance of Income Summary account = $2,000 credit
Beginning balance of Income Summary account = $1,500 debit
Expenses = Ending balance - Beginning balance
Expenses = $2,000 - $1,500
Expenses = $500. 
Therefore, the total amount of expenses for the period is $500, which is option D.

The Owner's Capital, Withdrawals, and Income Summary Accounts for Laurel