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 $315,000 and a credit of $449,500. At the same date,
Faye Barnes, Capital has a credit balance of $750,000, and Faye Barnes, Drawing has
a balance of $40,000. (a) Journalize the entries required to complete the closing of the
accounts. (b) Determine the amount of Faye Barnes, Capital at the end of the period.

Answer:
a. Income Summary........................................................... 134,500
                      Faye Barnes, Capital................................................ 134,500
                          ($449,500 – $315,000).


 Faye Barnes, Capital ..................................................... 40,000
                       Faye Barnes, Drawing.............................................. 40,000

b. $844,500 ($750,000 + $134,500 – $40,000)