Question

Beacon Signals Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Beacon Signals Company prepared the following end-ofperiod spreadsheet at December 31, 2019, fiscal year:

	Beacon Signals Company
	End-of-Period Spreadsheet
	For the Year Ended December 31, 2019
	Unadjusted Trial Balance		Adjustments		Adjusted Trial Balance
Account Title	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
Cash	13,000.00				13,000.00
Accounts Receivable	40,500.00		(a) 12,500.00		53,000.00
Prepaid Insurance	4,200.00			(b) 3,000.00	1,200.00
Supplies	3,000.00			(c) 2,250.00	750.00
Land	98,000.00				98,000.00
Building	500,000.00				500,000.00
Accumulated Depreciation-Building		255,300.00		(d) 9,000.00		264,300.00
Equipment	121,900.00				121,900.00
Accumulated Depreciation-Equipment		100,100.00		(e) 4,500.00		104,600.00
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
Sarah Colin, Capital		238,100.00				238,100.00
Sarah Colin, Drawing	10,000.00				10,000.00
Fees Earned		388,700.00		(a) 12,500.00		401,200.00
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) 9,000.00		9,000.00
Repairs Expense	8,850.00				8,850.00
Depreciation Expense-Equipment			(e) 4,500.00		4,500.00
Insurance Expense			(b) 3,000.00		3,000.00
Supplies Expense			(c) 2,250.00		2,250.00
Miscellaneous Expense	4,350.00				4,350.00
	1,000,000.00	1,000,000.00	37,450.00	37,450.00	1,030,900.00	1,030,900.00

Required:

1.	Prepare an income statement for the year ended December 31. 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 statement of owner’s equity for the year ended December 31. No additional investments were made during the year. For those boxes in which you must enter subtracted or negative numbers use 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.
3.	Prepare a balance sheet as of December 31. Fixed assets must be entered in order according to account number. 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 (:) or the word "Less" on the balance sheet; they will automatically insert where necessary.
4.	Based upon the end-of-period spreadsheet, journalize the closing entries. Explanations should be omitted. If you are unsure of account titles, see the chart of accounts.
5.	Prepare a post-closing trial balance.

Answer 1

BEACON SIGNALS COMPANY
Income Statement
For the Year Ended December 31, 2019
Fees earned	$401,200
Rent revenue	1,300
Total revenues		$402,500
Expenses:
Salaries and wages expense	$168,000
Advertising expense	21,700
Utilities expense	11,400
Repairs expense	8,850
Depreciation expense—equipment	4,500
Insurance expense	3,000
Supplies expense	2,250
Depreciation expense—building	9,000
Miscellaneous expense	4,350
Total expenses		233,050
Net income		$169,450

BEACON SIGNALS COMPANY
Statement of Owner’s Equity
For the Year Ended December 31, 2019
Sarah Colin capital, January 1, 2019		$238,100
Net income for the year	$169,450
Less withdrawals	10,000
Increase in owner’s equity		159,450
Sarah Colin , capital, December 31, 2019		$397,550

BEACON SIGNALS COMPANY
Balance Sheet
December 31, 2019
Assets				Liabilities
Current assets:				Current liabilities:
Cash		$             13,000		Accounts payable	$            15,700
Accounts receivable		53,000		Salaries and wages payable	4,900
Prepaid insurance		1,200		Unearned rent	800
Supplies		750		Total liabilities		$            21,400
Total current assets			$            67,950
Property, plant, and equipment:
Land		$             98,000
Building	$         500,000			Owner’s Equity
Less accumulated depreciation	264,300	235,700		Sarah Colin, capital		397,550
Equipment	$         121,900
Less accumulated depreciation	104,600	17,300
Total property, plant, and equipment			351,000
Total assets			$          418,950	Total liabilities and owner’s equity		$         418,950

2019		Closing Entries
Deceber	31	Fees Earned	401,200
		Rent Revenue	1,300
		Income Summary		402,500
	31	Income Summary	233,050
		Salaries and Wages Expense		168,000
		Advertising Expense		21,700
		Utilities Expense		11,400
		Repairs Expense		9,000
		Depreciation Expense—Equipment		8,850
		Insurance Expense		4,500
		Supplies Expense		3,000
		Depreciation Expense—Building		2,250
		Miscellaneous Expense		4,350
	31	Income Summary	169,450
		Sarah Colin, Capital		169,450
	31	Sarah Colin, Capital	10,000
		Sarah Colin, Drawing		10,000

BEACON SIGNALS COMPANY
Post-Closing Trial Balance
December 31, 2019
	Debit	Credit
	Balances	Balances
Cash	13,000
Accounts Receivable	53,000
Prepaid Insurance	1,200
Supplies	750
Land	98,000
Building	500,000
Accumulated Depreciation—Building		264,300
Equipment	121,900
Accumulated Depreciation—Equipment		104,600
Accounts Payable		15,700
Salaries and Wages Payable		4,900
Unearned Rent		800
Sarah Colin, Capital		397,550
	787,850	787,850