Andrew's share of net income is $35,000 and Barbara's share of net income is $45,000. Which of the following would be included in a closing entry as a result of these allocations? a. Andrew's capital account would be debited for $35,000. b. Andrew's capital account would be credited for $40,000. c. The income summary would be debited for $80,000. d. Barbara's capital account would be credited for $40,000.

Question

Joey Chang

Business

31 May, 09:31

Andrew's share of net income is $35,000 and Barbara's share of net income is $45,000. Which of the following would be included in a closing entry as a result of these allocations? a. Andrew's capital account would be debited for $35,000. b. Andrew's capital account would be credited for $40,000. c. The income summary would be debited for $80,000. d. Barbara's capital account would be credited for $40,000.

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Arjun Wang · Answer 1

c. The income summary would be debited for $80,000

Explanation:

While closing the entry we debited the income summary account for $80,000 which includes the Andrew share of net income for $35,000 and Barbara share of net income for $45,000

In mathematically,

Income summary = Andrew share of net income + Barbara share of net income

$80,000 = $35,000 + $45,000

$80,000 = $80,000 = Balanced