Question

Lamp Light Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Lamp Light Company prepared the following end-of-period spreadsheet at December 31, 2018, the end of the fiscal year:

	Lamp Light Company
	End-of-Period Spreadsheet
	For the Year Ended December 31, 2018
	Unadjusted Trial Balance		Adjustments		Adjusted Trial Balance
Account Title	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
Cash	10,800.00				10,800.00
Accounts Receivable	38,900.00		(a) 11,300.00		50,200.00
Prepaid Insurance	4,200.00			(b) 3,000.00	1,200.00
Supplies	2,730.00			(c) 2,250.00	480.00
Land	98,000.00				98,000.00
Building	400,000.00				400,000.00
Accumulated Depreciation-Building		205,300.00		(d) 10,100.00		215,400.00
Equipment	101,000.00				101,000.00
Accumulated Depreciation-Equipment		85,100.00		(e) 6,680.00		91,780.00
Accounts Payable		15,700.00				15,700.00
Salaries and Wages Payable				(f) 4,900.00		4,900.00
Unearned Rent		2,100.00	(g) 1,300.00			800.00
Common Stock		75,000.00				75,000.00
Retained Earnings		128,100.00				128,100.00
Dividends	10,000.00				10,000.00
Fees Earned		363,700.00		(a) 11,300.00		375,000.00
Rent Revenue				(g) 1,300.00		1,300.00
Salaries and Wages Expense	163,100.00		(f) 4,900.00		168,000.00
Advertising Expense	21,700.00				21,700.00
Utilities Expense	11,400.00				11,400.00
Depreciation Expense-Building			(d) 10,100.00		10,100.00
Repairs Expense	8,850.00				8,850.00
Depreciation Expense-Equipment			(e) 6,680.00		6,680.00
Insurance Expense			(b) 3,000.00		3,000.00
Supplies Expense			(c) 2,250.00		2,250.00
Miscellaneous Expense	4,320.00				4,320.00
	875,000.00	875,000.00	39,530.00	39,530.00	907,980.00	907,980.00

Required:

1.	Prepare an income statement for the year ended December 31, 2018. If a net loss has been incurred, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Use the list of Labels and Amount Descriptions for the correct wording of text items other than account names. You will not need to enter colons (:) on the income statement.
2.	Prepare a retained earnings statement for the year ended December 31, 2018. If a net loss is incurred or dividends were paid, enter that amount as a negative number using a minus sign. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Refer to the Chart of Accounts for exact wording of account titles.
3.	Prepare a balance sheet as of December 31, 2018. Fixed assets must be entered in order according to account number. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Refer to the Chart of Accounts for exact wording of account titles. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
4.	Based upon the end-of-period spreadsheet, journalize the closing entries. Refer to the Chart of Accounts for exact wording of account titles.
5.	Prepare a post-closing trial balance.

Answer 1

1	Lamp Light Company
	Income Statement
	For the Year Ended December 31, 2016
	Revenues:
	Fees Earned	$                           375,000
	Rent Revenue	$                                1,300	$          376,300
	Less: Expenses
	Salaries and Wages Expense	$                           168,000
	Advertising Expense	$                              21,700
	Utilities Expense	$                              11,400
	Depreciation Expense-Building	$                              10,100
	Repairs Expense	$                                8,850
	Depreciation Expense-Equipment	$                                6,680
	Insurance Expense	$                                3,000
	Supplies Expense	$                                2,250
	Miscellaneous Expense	$                                4,320	$       (236,300)
	Net Income		$          140,000
2	Lamp Light Company
	Statement of owner’s equity
	For the Year Ended December 31, 2016
	Ted Hickman, Capital	$                           203,100
	Add: Net income	$                           140,000
	Less: Ted Hickman, Drawing	$                           (10,000)
	Owner’s equity as on Dec 31, 2016	$                           333,100
3	Lamp Light Company
	Balance Sheet
	As on Dec. 31, 2016
	Assets :
	Cash	$                              10,800
	Accounts Receivable	$                              50,200
	Prepaid Insurance	$                                1,200
	Supplies	$                                    480
	Land	$                              98,000
	Building	$                           400,000
	Less: Accumulated Depreciation-Building	$                         (215,400)
	Equipment	$                           101,000
	Less: Accumulated Depreciation-Equipment	$                           (91,780)
	Total Assets	$                           354,500
	Liabilities :
	Accounts Payable	$                              15,700
	Salaries and Wages Payable	$                                4,900
	Unearned Rent	$                                    800
	Equity:
	Owner's Equity	$                           333,100
	Total Liabilities and Equity	$                           354,500
4	Closing Entries:
	Accounts / Explanation	Debit	Credit
	Income Summary	$                           376,300
	Fees Earned		$          375,000
	Rent Revenue		$              1,300
	(Being revenue accounts Closed)
	Salaries and Wages Expense	$                           168,000
	Advertising Expense	$                              21,700
	Utilities Expense	$                              11,400
	Depreciation Expense-Building	$                              10,100
	Repairs Expense	$                                8,850
	Depreciation Expense-Equipment	$                                6,680
	Insurance Expense	$                                3,000
	Supplies Expense	$                                2,250
	Miscellaneous Expense	$                                4,320
	Income Summary		$          236,300
	(Being expenses accounts Closed)
	Income Summary	$                           140,000
	Ted Hickman, Capital		$          140,000
	(Being net income closed)
	Ted Hickman, Capital	$                              10,000
	Ted Hickman, Drawing		$            10,000
	(Being Drawings closed)
5	Post Closing Trial Balance
	Account Title	Dr.	Cr.
	Cash	$                              10,800
	Accounts Receivable	$                              50,200
	Prepaid Insurance	$                                1,200
	Supplies	$                                    480
	Land	$                              98,000
	Building	$                           400,000
	Accumulated Depreciation-Building		$          215,400
	Equipment	$                           101,000
	Accumulated Depreciation-Equipment		$            91,780
	Accounts Payable		$            15,700
	Salaries and Wages Payable		$              4,900
	Unearned Rent		$                  800
	Ted Hickman, Capital		$          333,100
	Total	$                           661,680	$          661,680