The income statement for Basket Weavers Inc. for the year ended June 30, 2012, is provided.Basket Weavers Inc.Income StatementFor the Year Ended June 30, 2012Sales revenue. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 786,000Cost of goods sold. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (402,000)Selling and general expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53,800)Income before income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 330,200Income tax expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115,570)Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 214,6301. 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?View Solution:
The income statement for Basket Weavers Inc for the year



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