Question

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.

Answer 1

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

Step-by-step 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