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Can you explain the math? Mahmoud Manufacturing buys rugs to resell to customers. Mahmoud's December 31st T-Account balances, before recording Tax Expense and the closing
Can you explain the math?
Mahmoud Manufacturing buys rugs to resell to customers. Mahmoud's December 31st T-Account balances, before recording Tax Expense and the closing journal entry, are below. Cash 1,790 Accounts Receivable 210 Inventory 9,230 Equipment 1,200 Accounts Payable 300 Salary Expense 960 Salary Payable 640 Interest Expense 90 Additional Paid-In Capital 3,000 Notes Payable 4,530 Retained Earnings o Rug Revenue 6,225 Cost of Goods Sold 1,040 Rent Expense 465 Common Stock 30 Tax Expense 0 Tax Payable 0 Using the above information, Mahmoud first records his income tax expense, and then makes his closing entry. How much will Mahmoud debit or credit Retained Earnings for in his closing journal entry? Assume an income tax rate of 15% of net income before taxes. Use a negative number to represent a debit to Retained Earnings. Round your final answer to one decimal placeStep by Step Solution
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