The income statement for Eriksen Enterprises for the year ended June 30, 2003, is provided.

1. 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?

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Sales revenue. Cost of goods sold Selling and general expenses Income before income taxes. Income tax expense Net income.. Eriksen Enterprises Income Statement For the Year Ended June 30, 2003 $187,000 (122,000) (20,500) $ 44,500 (17,800) $ 26,700