The following information is available for Crandall Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Crandall, Capital?
A) $80,000.
B) $64,400.
C) $43,000.
D) $32,400.
E) $42,400.

Question

The following information is available for Crandall Company before closing the accounts. What will be the amount in the Income Summary account that should be closed to Crandall, Capital? 
A) $80,000. 
B) $64,400. 
C) $43,000. 
D) $32,400. 
E) $42,400.

Quizplus · Accepted Answer

To determine the amount to be closed to Crandall, Capital, we need to subtract the expenses from the revenues. 
Revenues: $123,000 - Cost of Goods Sold: $49,200 - Operating Expenses: $9,400 - Interest Expense: $400 - Income Tax Expense: $9,200 = $64,400. Therefore, the amount to be closed to Crandall, Capital is $64,400.

The Following Information Is Available for Crandall Company Before Closing