Case 3-78 Interpreting Closing Entries
Barnes Building Systems made the following closing entries at the end of a recent year:
a. Income Summary ............................. 129,750
Retained Earnings ........................ 129,750
b. Retained Earnings ........................... 25,000
Dividends ..................................... 25.000
c. Sales Revenue .................................. 495,300
Income Summary ......................... 495,300
d. Income Summary ............................. 104,100
Interest Expense ........................... 104,100
Required:
1. What was Barnes’s net income?
Concept Introduction:
Closing Entries: Closing entries is the process of closing temporary accounts at the end of year. Closing entries are prepared after preparing the adjusted trial balance. In the process of closing entries following steps are follows in the form of journal entries:
To Calculate:
The Net income of Barnes Building Systems.
The Net income of Barnes Building Systems for the year is calculated as follows:
The Net income can be found from t...
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