Use the following information to answer the questions:
Income statement for month of June, 2008 of Delgado Enterprises contains following information:
| Revenues |
$7,000 |
| Expenses: |
|
| Wages Expense |
$2,000 |
| Rent Expense |
1,000 |
| Supplies Expense |
300 |
| Advertising Expense |
200 |
| Insurance Expense |
100 |
| Total expenses |
3,600 |
| Net income |
$3,400 |
1. Entry to close revenue account includes a:
a. debit to Income Summary for $3,400.
b. credit to Income Summary for $3,400.
c. debit to Income Summary for $7,000.
d. credit to Income Summary for $7,000.
2. Entry to close expense accounts includes a:
a. debit to Income Summary for $3,400.
b. credit to Rent Expense for $1,000,
c. credit to Income Summary for $3,600.
d. debit to Wages Expense for $2,000.
3. After revenue and expense accounts have been closed, balance in Income Summary will be:
a. $0.
b. a debit balance of $3,400.
c. a credit balance of $3,400.
d. a credit balance of $7,000.
4. Entry to close Income Summary to Retained Earnings includes:
a. a debit to Revenue for $7,000.
b. credits to Expenses totaling $3,600.
c. a credit to Income Summary for $3,400
d. a credit to Retained Earnings for $3,400.
5. At June 1, 2008, Delgado reported retained earnings of $35,000. Company had no dividends during June. At June 30, 2008, company will report retained earnings of
a. $35,000.
b. $42,000.
c. $38,400.
d. $31,600.