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High Step Shoes had annual revenues of $185,000, expenses of $103,700, and dividends of $18,000 during the current year. The retained earnings account before closing had a balance of $297,000. The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Multiple Choice Debit Retained Earnings $297,000; credit Income Summary $297,000 Debit Retained Earnings $63,300; credit Income Summary $63,300 Debit Income Summary $63,300; credit Retained Earnings $63,300 Debit Income Summary $81,300, credit Retained Earnings $81,300 Debit Retained Earnings $81,300; credit Income Summary $81,300

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The entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Debit Income Summary $81,300, credit Retained earnings $81,300.

Income Summary account

First step is to find the net income

Annual revenues $ 185,000

Less: Expenses ($ 103,700 )

Net Income $ 81,300

Second step is to prepare the journal entry

Debit Income Summary $ 81,300

Credit Retained earnings  $ 81,300

(To close the income summary account to Retained earnings)  

Inconclusion the entry to close the Income Summary account at the end of the year, after revenue and expense accounts have been closed, is: Debit Income Summary $81,300, credit Retained earnings $81,300.

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