To solve this question, we need to close out and transfer the total amount of expenses from all sources to the Income Summary account. We'll examine each of the expenses listed in the Partial Trial Balance and also include the adjustments provided.
1. Salaries Expense:
- Initial: \[tex]$1,200
- Adjustment: Salaries due but unpaid: \$[/tex]750
- Total: \[tex]$1,200 + \$[/tex]750 = \[tex]$1,950
2. Office Supplies Expense:
- Initial: \$[/tex]1,000,000
- Adjustment: Supplies used during October: \[tex]$120
- Total: \$[/tex]1,000,000+\[tex]$120 = \$[/tex]1,000,120
3. Rent Expense:
- Initial: \[tex]$2,900
4. Telephone Expense:
- Initial: \$[/tex]600
5. Insurance Expense:
- Initial: \[tex]$720
- Adjustment: Expired insurance premiums for the month: \$[/tex]75
- Total: \[tex]$720 + \$[/tex]75 = \[tex]$795
6. Sheila James, Drawing:
- This is not an expense, so it is excluded.
7. Taxes Expense:
- Initial: \$[/tex]1,420
8. Miscellaneous Expense:
- Initial: \[tex]$905
Next, we sum up all these adjusted expenses to find the total amount to be closed out and transferred to the Income Summary account:
\[
\begin{align*}
\text{Total Expenses} &= (\text{Salaries Expense Total} + \text{Office Supplies Expense Total} + \text{Rent Expense} + \text{Telephone Expense} + \text{Insurance Expense Total} + \text{Taxes Expense} + \text{Miscellaneous Expense}) \\
&= (1,950 + 1,000,120 + 2,900 + 600 + 795 + 1,420 + 905) \\
&= \$[/tex]1,008,690
\end{align*}
\]
Therefore, the total amount of expense from all sources to be closed out and transferred to the Income Summary account is \$1,008,690.
