The adjusted balances for Tomas Co. are listed below.
Cash, $20,000
Accounts Receivable, $2,500
Prepaid Insurance, $3,500
Equipment, $15,000
Accumulated Depreciation, $2,000
Accounts Payable, $4,000
J. Tomas, Capital, $30,000
J. Tomas, Drawing, $10,000
Income from Services, $35,000
Wages Expense, $12,000
Rent Expense, $8,000
The entry to close Income Summary would involve a
A) credit to Net Income, $15,000.
B) debit to Income Summary, $15,000.
C) debit to Net Income, $15,000.
D) debit to J. Tomas, Capital, $15,000

Question

The adjusted balances for Tomas Co. are listed below.
 Cash, $20,000
Accounts Receivable, $2,500
Prepaid Insurance, $3,500
Equipment, $15,000
Accumulated Depreciation, $2,000
Accounts Payable, $4,000
J. Tomas, Capital, $30,000
J. Tomas, Drawing, $10,000
Income from Services, $35,000
Wages Expense, $12,000
Rent Expense, $8,000
The entry to close Income Summary would involve a
A) credit to Net Income, $15,000.
B) debit to Income Summary, $15,000.
C) debit to Net Income, $15,000.
D) debit to J. Tomas, Capital, $15,000

Quizplus · Accepted Answer

The entry to close Income Summary involves transferring the balance of Income from Services to Income Summary and then closing Income Summary to J. Tomas, Capital. Therefore, the entry would be a debit to Income Summary, $35,000 and a credit to Income from Services, $35,000.

The Adjusted Balances for Tomas Co