Chapter 2, Problem 2.12E

1.

To determine

Income statement:

This is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time. It is prepared to find out the net income of an organization.

Classified Balance Sheet:

A balance sheet is a statement showing position of all assets, liabilities and equity of the company at a specific time. When assets, liabilities and shareholders’ equity are further sub-categorized to make it more readable and understandable then it is called classified balance sheet

Closing Entries:

Closing entries are those journal entries which are passed to transfer the balances of temporary accounts to the permanent accounts. These are passed at the end of the period, to transfer the final balance.

To Prepare: An income statement for the year ended December 31, 2016.

To determine

To Prepare: A classified balance sheet as of December 31, 2016.

2.

To determine

To Prepare: The necessary closing entries at December 31, 2016.