EX 4-16 Closing entries with net income

After all revenue and expense accounts have been closed at the end of the fiscal year, Income Summary has a debit of $490,750 and a credit of $613,400. At the same date, Darcy Lewis, Capital has a credit balance of $833,600, and Darcy Lewis, Drawing has
a balance of $55,000. (a) Journalize the entries required to complete the closing of the accounts. (b) Determine the amount of Darcy Lewis, Capital at the end of the period.


Answer:

a.
 Income Summary 122,650
Darcy Lewis, Capital 122,650
($613,400 – $490,750).
Darcy Lewis, Capital 55,000
Darcy Lewis, Drawing 55,000
b. $901,250 ($833,600 + $122,650 – $55,000)