Chapter 4, Problem 1PA

Financial statements and closing entries

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:

Instructions

1. 1. Prepare an income statement for the year ended December 31, 20Y5.
2. 2. Prepare a statement of stockholders’ equity for the year ended December 31, 20Y5. During the year, common stock of $25,000 was issued.
3. 3. Prepare a balance sheet as of December 31, 20Y5.
4. 4. Based upon the end-of-period spreadsheet, journalize the closing entries.
5. 5. Prepare a post-closing trial balance.