Question

Preparing Financial Statements and Closing Entries
Beneish Corporation has the following account balances at December 31, the end of its fiscal year.

BENEISH CORPORATION Adjusted Trial Balance December 31
	Debit	Credit
Cash	$ 8,000
Accounts receivable	13,000
Equipment	156,000
Accumulated depreciation		$ 28,000
Notes payable		20,000
Common stock		86,000
Retained earnings		41,200
Dividends	16,000
Service fees earned		142,000
Rent expense	36,000
Salaries expense	74,200
Depreciation expense	14,000
Totals	$317,200	$317,200

(a) Prepare Beneish Corporation's income statement and statement of stockholders' equity for year-end December 31, and its balance sheet as of December 31. There were no stock issuances or repurchases during the year. (Do not use negative signs with your answers unless otherwise noted.)

Beneish Corporation Income Statement For Year Ended December 31
Answer

Answer
Rent expense	Answer
Salaries expense	Answer
Depreciation expense	Answer
Net income	Answer

Note: Use a negative sign for any answer that decreases the balance.

Beneish Corporation Statement of Stockholders' Equity For Year Ended December 31
	Common Stock	Retained Earnings	Total Stockholders' Equity
Balance at December 31, Beg	Answer	Answer	Answer
Stock issuance	Answer	Answer	Answer
Answer

Answer	Answer	Answer
Net income	Answer	Answer	Answer
Balance at December 31, End	Answer	Answer	Answer

Note: Use a negative sign with your accumulated depreciation answer.

Beneish Corporation Balance Sheet December 31
Assets	Liabilities
Answer

Answer Accounts receivable Answer Equipment, gross Answer Accumulated depreciation Answer Equipment, net Answer Total assets Answer

Answer

Answer
Total liabilities	Answer
Common stock	Answer
Answer

Answer Total liabilities and equity Answer

(b) Prepare journal entries to close Beneish's temporary accounts.

GENERAL JOURNAL
Ref.	Description	Debit	Credit
(1)	Answer

Answer	Answer
	Answer

Answer	Answer
	To close revenue account.
(2)	Answer

Answer	Answer
	Answer

Answer	Answer
	To close rent expense account.
(3)	Answer

Answer	Answer
	Answer

Answer	Answer
	To close salaries expense account.
(4)	Answer

Answer	Answer
	Answer

Answer	Answer
	To close depreciation expense account.
(5)	Answer

Answer	Answer
	Answer

Answer	Answer
	To close dividend account.

(c)Set up T-accounts for each account and post the closing entries. Note: Only those ledger accounts affected by closing process are shown here.

• Enter beginning balances in the appropriate answer box.

• Enter transactions in the T-accounts in the order they appear, using first available answer box on the appropriate side of the T-account.

• Compute the ending balances.

Retained Earnings
	Answer	Answer	Beg Bal.
	Answer	Answer
	Answer	Answer
	Answer	Answer
	Answer	Answer	End Bal.

Service Fees Earned
	Answer	Answer	Beg Bal.
	Answer	Answer	End Bal.

Rent Expense
Beg Bal.	Answer	Answer
End Bal.	Answer	Answer

Depreciation Expense
Beg Bal.	Answer	Answer
End Bal.	Answer	Answer

Salaries Expense
Beg Bal.	Answer	Answer
End Bal.	Answer	Answer

Dividends
Beg Bal.	Answer Mark 0.00 out of 1.00	Answer
End Bal.	Answer	Answer

Answer 1