Question

Facebook, Inc., is a publicly held corporation and issued its financial statements for 2015 earlier in 2016. To follow is a condensed and adapted trial balance as of December 31, 2015, that was constructed from those financial statements. Please note that the accounts have been adapted and condensed for educational use and should not be used for investment decisions. Facebook Trial Balance

Facebook, Inc. Consolidated trial balance (adapted for classroom use) As of December 31, 2015

Debit Credit Cash and cash equivalents $ 4,907 - Debit

Marketable securities 13,527 - Debit

Accounts receivable, net 2,559 - debit

Prepaid and other expenses 659- debit

Property and equipment

net 5,687 - debit

Intangible assets, net 3,246 - debit

Other long-term assets 18,822 - debit

Accounts payable $ 196 - credit

Other current liabilities 1,729 - credit

Capital lease obligations, long-term 107 - credit

Other long-term liabilities 3,157 - credit

Common stock and other 34,431 - credit

Beginning retained earnings 6,099 - credit

Net revenues 17,928 - credit

Expenses 11,703 - debit

Other expenses and adjustments 2,537 - debit

Totals $ 63,647- debit $ 63,647 - credit

Questions:

A) what accounts on FB Inc. trial balance should be closed?

B) Using the FB Inc. trial balance, what closing entries would FB Inc. make for 2015?

C) What was FB Inc. net income for the year ended December 31, 2015

Answer 1

A) Temporary accounts i.e. Net Revenues, Expenses and Other Expenses and adjustments accounts should be closed

B)

Account Titles	Debit	Credit
Net Revenues	$            17,928
Income Summary		$          17,928
Income Summary	$            14,240
Expenses		$          11,703
Other Expenses and Adjustments		$            2,537
Income Summary	$               3,688
Retained Earnings		$            3,688

C) Net Income = $3688