Question

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Hudson Company has the following account balances: Sales Revenue $195,000, Sales Discounts $2,000, Cost of Goods Sold $117,000, and Inventory $40,000. Prepare the entries to record the closing of these items to Income Summary. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit (To dose accounts with credit balances) (To dose accounts with debit balances)

Answer 1

Account Titles and Explanation	Debit	Credit
Sales revenue	$195,000
Income summary		$195,000
( To close accounts with credit balances)
Income summary	$119,000
Sales discount		$2,000
Cost of goods sold		$117,000
( To close accounts with debit balances)

Arndt Company
Income Statement (Partial)
Sales:
Total Sales		380,000
Less:
Sales discount	5,000
Sales returns and allowances	11,000
		-16,000
Net Sales		$364,000

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