Answered: Beacons Company maintains and repairs…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Beacons Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Beacons Company prepared the following end-of-period spreadsheet at December 31, 20Y5, the end of the fiscal year:

	Beacons Company
	End-of-Period Spreadsheet
	For the Year Ended December 31, 20Y5
	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) 9,100.00		48,000.00
Prepaid Insurance	4,200.00			(b) 3,150.00	1,050.00
Supplies	2,730.00			(c) 2,180.00	550.00
Land	98,000.00				98,000.00
Building	400,000.00				400,000.00
Accumulated Depreciation-Building		205,300.00		(d) 12,000.00		217,300.00
Equipment	101,000.00				101,000.00
Accumulated Depreciation-Equipment		85,100.00		(e) 4,800.00		89,900.00
Accounts Payable		15,700.00				15,700.00
Salaries and Wages Payable				(f) 5,000.00		5,000.00
Unearned Rent		2,100.00	(g) 1,100.00			1,000.00
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) 9,100.00		372,800.00
Rent Revenue				(g) 1,100.00		1,100.00
Salaries and Wages Expense	158,100.00		(f) 5,000.00		163,100.00
Advertising Expense	21,700.00				21,700.00
Utilities Expense	16,400.00				16,400.00
Depreciation Expense-Building			(d) 12,000.00		12,000.00
Repairs Expense	8,850.00				8,850.00
Depreciation Expense-Equipment			(e) 4,800.00		4,800.00
Insurance Expense			(b) 3,150.00		3,150.00
Supplies Expense			(c) 2,180.00		2,180.00
Miscellaneous Expense	4,320.00				4,320.00
	875,000.00	875,000.00	37,330.00	37,330.00	905,900.00	905,900.00

Required:

1.	Prepare an income statement for the year ended December 31, 20Y5. 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 stockholders’ equity for the year ended December 31, 20Y5. During the year, common stock of $25,000 was issued. 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, 20Y5. 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.

CHART OF ACCOUNTS

Beacons Company

General Ledger

	ASSETS
11	Cash
12	Accounts Receivable
13	Prepaid Insurance
14	Supplies
15	Land
16	Building
17	Accumulated Depreciation-Building
18	Equipment
19	Accumulated Depreciation-Equipment

	LIABILITIES
21	Accounts Payable
22	Salaries and Wages Payable
23	Unearned Rent

	EQUITY
31	Common Stock
32	Retained Earnings
33	Dividends

	REVENUE
41	Fees Earned
42	Rent Revenue

Labels
Current assets
Current liabilities
December 31, 20Y5
Expenses
For the Year Ended December 31, 20Y5
Property, plant, and equipment
Revenues
Amount Descriptions
Book value-building
Book value-equipment
Balances, December 31, 20Y5
Balances, January 1, 20Y5
Issued common stock
Dividends
Net income
Net loss
Total assets
Total current assets
Total expenses
Total liabilities
Total liabilities and stockholders’ equity
Total property, plant, and equipment
Total revenues
Total stockholders’ equity

2. Prepare a statement of stockholders’ equity for the year ended December 31, 20Y5. During the year, common stock of $25,000 was issued. 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.

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2
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Beacons Company
Statement of Stockholders' Equity
(Label)
Common Stock
Retained
Earnings
Total

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Beacons Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Beacons Company prepared the following end-of-period spreadsheet at December 31, 20Y5, the end of the fiscal year: Beacons Company End-of-Period Spreadsheet For the Year Ended