Dogwood, Inc. earned revenues of $11,000 and incurred expens

Dogwood, Inc. earned revenues of $11,000 and incurred expenses of $7,500. The company declared and paid cash dividends of $2,000. What is the balance in the Income Summary account prior to closing net income or loss to the Retained Earnings account?

A) debit balance of $3,500
B) debit balance of $1,500
C) credit balance of $3,500
D) credit balance of $11,000

ANSWER

C .Revenue $11,000
Expenses – 7,500
Net Income $3,500