The income statement for Eriksen Enterprises for the year ended June 30, 2003, is provided.
Eriksen Enterprises
Income Statement
For the Year Ended June 30, 2003
|
Sales revenue . |
$187,000 |
|
Cost of goods sold |
122,000 |
|
Selling and general expenses |
20,500 |
|
Income before income taxes |
$44,500 |
|
Income tax expense |
17,800 |
|
Net income . |
$26,700 |
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?