During Year 5,Magellan Corporation Earned Net Income of $32,000 and Paid

question 59

Multiple Choice

During Year 5,Magellan Corporation earned net income of $32,000 and paid cash dividends of $8,500 to its stockholders.Which of the following choices reflects the effect of closing entries on the company's financial statements?

• A)The income statement will report net income of $23,500 after the closing entries have been posted to the ledger accounts.
• B)The balance sheet will report retained earnings of $23,500 after the closing entries have been posted to the ledger accounts.
• C)The balance sheet will report retained earnings of $32,000 after the closing entries have been posted to the ledger accounts.
• D)The amounts reported on the financial statements will not be affected by the closing entries.

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Definitions:

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