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    Closing Entry - Roberts Enterprises

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    Closing Entry
    The income statement for Roberts Enterprises for the year ended June 30, 2006, is provided.

    Roberts Enterprises
    Income Statement
    For the Year Ended June 30, 2006
    Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 263,000
    Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (148,000)
    Selling and general expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,300)
    Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 93,700
    Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33,000)
    Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 60,700

    1. Prepare a journal entry to close the accounts to Retained Earnings.
    2. What problem may arise in closing the accounts if the information from the income statement is used?

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    Closing Entry
    The income statement for Roberts Enterprises for the year ended June 30, 2006, is provided.

    Roberts Enterprises
    Income Statement
    For the Year Ended June 30, 2006
    Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 263,000
    Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...

    Solution Summary

    This solution discusses journal entries and income statements.

    $2.19

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