A Merchandiser Uses a Perpetual Inventory System

question 175

Multiple Choice

A merchandiser uses a perpetual inventory system.The beginning Retained Earnings balance of the merchandiser was $99,000.During the year,Sales Revenue amounted to $73,000,Sales Returns and Allowances were $1,400,Sales Discounts were $3,100,Cost of Goods Sold was $30,000,and all other expenses totaled $16,000.The company declared and paid $25,000 as dividends.The last step in the closing process would include ________.

• A)a debit to Income Summary for $50,500
• B)a credit to Income Summary for $73,000
• C)a debit to the Retained Earnings account for $20,500
• D)a debit to the Retained Earnings account for $25,000

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