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Appendix EX 4-28 Closing entries from an end-of-period sprea Based on the data in Exercise 4-25, prepare the c dsheet (work sheet) closing entries for Zeidman Services Co s Series A PR 4-1A Financial statements and closing entries Beacon Company maintains and repairs towers and lighthouses. Beacon Company prepared the end-of-period sp on the next page at October 31, 2012, the end of the current fiscal year Instructions 1. Prepare an income statement for the year ended October 31. 2. Prepare a retained earnings statement for the year ended October 31. 3. Prepare a balance sheet as of October 31. 4. Based upon the end-of-period spreadsheet, journalize the closing entries. warning lights, such as those found on radio readsheet shown

Solution

Ans.1 BEACON COMPANY Income Statement For the month ended October 31, 2012 Particulars Amt. ($) Fees revenue      307,000 Rent revenue          1,000 Total      308,000 Less Expenses: Salaries and Wages expenses      114,900 Advertising expenses        21,700 Utilities expenses        11,400 Repairs expenses          8,850 Depreciation expenses-eqipment          3,200 Insurance expenses          2,500 Supplies expenses          1,730 Depreciation expenses-building          1,600 Miscellaneous expenses          4,320 Total Expenses      170,200 Net Income      137,800 Ans.2 BEACON COMPANY Retained Earning Statement For the month ended October 31, 2012 Amt. ($) Retained earnings, November 1, 2011            78,100 Net income for the year          137,800 Less: Dividends            10,000 Increase in retained earnings          127,800 Retained earnings, October 31, 2012          205,900 Ans.3 BEACON COMPANY Balance Sheet Year ended October 31, 2012 Assets Amt. ($) Amt ($) Liabilities Amt.($) Amt ($) Current Asset Current Liabilities: Cash              5,800 Accounts Payable              5,700 Account receivable            22,200 Salaries and Wages payable              1,800 Prepaid Insurance              1,700 Unearned rent              1,100 Supplies              1,000 Total Current Liabilities (A)              8,600 Total current Assets (A)        30,700 Property, plant and equipment: Stockholder\'s Equity: Land        98,000 Capital stock            25,000 Building          200,000 Retained earnings          205,900 Less: accum. depreciation          101,900        98,100 Total stockholder\'s equity (B)          230,900 Equipment          101,000 Less: accum. depreciation            88,300        12,700 Total Property, plant and equipment: (B)      208,800 Total Assets (A+B)      239,500 Total Liabilities and stockholder\'s equity (A+B)          239,500 BEACON COMPANY Journal Entries Ans.4 Account Titles Dr. ($) Cr. ($) Oct.31 Accounts receivable          3,300     To Fees Revenue              3,300 Oct.31 Unearned rent          1,000     To Rent revenue              1,000 Oct.31 Fees revenue earned      307,000 Rent revenue earned          1,000       To Income Summary          308,000 Oct.31 Insurance Expense          2,500     To Prepaid insurance              2,500 Oct.31 Supplies          1,730     To Supplies expense              1,730 Oct.31 Depr.Expense Building          1,600     To Accum.Depreciation-Building              1,600 Oct.31 Depr.Expense Equipment          3,200     To Accum.Depreciation-Equipment              3,200 Oct.31 Salaries and Wages expense          1,800     To Salaries and wages payable              1,800 Oct.31 Income summary      170,200      To Insurance expense              2,500      To Supplies              1,730      To Accum. Depr. Building              1,600      To Accum. Depr. Equipment              3,200      To Salaries and wages expense          114,900      To Advertising expense            21,700     To Utilities expense            11,400     To Repairs expense              8,850     To Misc. Expense              4,320 Oct.31 Income Summary      137,800     To Retained Earning          137,800 ( Hint: $30,8000 - $170,200 ) Oct.31 Dividends        10,000     To Retained earnings            10,000 Ans.5 BEACON COMPANY Post Closing Trial Balance For the month ended October 31, 2012 Account Titles Dr. ($) Cr. ($) Cash          5,800 Account receivable        22,200 Prepaid Insurance          1,700 Supplies          1,000 Building      200,000 Equipment      101,000 Land        98,000 Accum. Depreciation-Building          101,900 Accum. Depreciation-Equipment            88,300 Accounts Payable              5,700 Salaries and Wages payable              1,800 Unearned rent              1,100 Capital stock            25,000 Retained earnings          205,900 Total      429,700          429,700