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At December 31, Riverbed Corporation reports net income of $454,000. Prepare the entry to close net income. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer :

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Answer:

Dr Profit and loss account $454,000

Cr Retained earnings $454,000

Explanation:

Preparation of the Journal entry to close net income for Riverbed Corporation

Based on the information given we were told that the Corporation reports net income of the amount of $454,000 on December 31 this means the Journal entry to close the account will be recorded as:

Dr Profit and loss account $454,000

Cr Retained earnings $454,000

The journal entry is

Income Summary $454,000

      Retained earnings  $454,000
(Being Net income closed to retained earnings account)

  • Journal entry as of December 31 is:

Income Summary $454,000

      Retained earnings  $454,000
(Being Net income closed to retained earnings account)

Here the income summary is debited and credited to the retained earnings account.

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