Below is a summarized income statement for St. Bruno Inc.
St. Bruno Inc.
Income Statement for the Year Ended December 31, 2017
Revenue...............      $5,125,000
Expenses ...............      3,225,000
Net income............... $1,900,000
a. Prepare a spreadsheet and make the entry that is necessary to close the temporary accounts. Assume the balance in retained earnings on December 31, 2016 was $13,750,000.
b. Prepare the journal entry necessary to close the temporary accounts.
c. Explain why closing entries are necessary and when they should be recorded.
d. What would be the effect on net income in 2018 if St. Bruno Inc. forgot to prepare the closing entry in 2017?