Question

review the closing journal entries you prepared above. dividends retained earnings income summary adj bal 43,000 clos (4) 43,000 15,850 adj bal clos (2) 149,950 231,000 clos (1) 43,000 clos (4) 81,050 clos (3) 81,050 bal bal 0 53,900 bal clos (3) 81,050 0 bal requirement 3. how much was business markdown systems net income or net loss? (enter a loss with a minus sign or parentheses ) net income (loss) =

Explanation:

Step1: Recall net - income formula

Net income (loss) is calculated as revenues minus expenses and is also related to the changes in the Income Summary account. The closing entries transfer revenues and expenses to the Income Summary account. When closing entries are made, revenues are credited to Income Summary and expenses are debited to Income Summary. The balance in the Income Summary account before closing it to Retained Earnings represents the net income or net loss.

Step2: Analyze Income Summary account

The Income Summary account has a credit entry of $231,000$ (from closing revenues - Clos (1)) and debit entries of $149,950$ (from closing expenses - Clos (2)) and $81,050$ (from closing to Retained Earnings - Clos (3)).
The balance of the Income Summary account before closing to Retained Earnings is calculated as follows:
\[231000-(149950 + 81050)\]
\[231000 - 231000=0\]

Answer:

$0$