Reference no: EM132597468

Annabelle and Sarah are halfway done with entering closing entries. They've taken care of steps one and two, to close out revenue and expense accounts. Now, they need to handle the income summary and Drawing accounts.

• First, they're going to subtract expenses from revenue in the income summary account. They'll close out income summary by crediting the result in Capital (Scott, 2018).
• For example, they closed out $50,000 in revenue in income summary, and $15,000 in expenses. They will credit $35,000 to Capital to close out the income summary.
• Finally, they'll close out Drawing by debiting that amount to Capital.
• Now, For Rover's Sake is ready for the next accounting cycle.
• It's your turn to step into Annabelle's or Sarah's shoes and play the role of For Rover's Sake's accountant. You're halfway through recording closing entries to complete the accounting cycle. You're exhausted from a month's worth of holidays, and looking forward to a vacation you have planned for early January.
• You've closed out $1,237,814.32 in revenue to the income summary. Hey, it's been a good year and you even got a bonus from For Rover's Sake. But you're not done with the hard work yet.
• You've closed out $67,304.15 in expenses to the income summary. The Drawing account holds a balance of $92,571.34.

Question 1: How much will you credit to Capital? Round your answer to the nearest dollar.

Question 2: Describe your next steps as the accountant For Rover's Sake once you have calculated the amount to credit to Capital.