Anne Marie, the owner of Anne?s Beauty Salon, comes to see you again.She tells you that she has one more question for you.

She told you that her accountant tried to explain to her the closing process in the accounting cycle.The more he talked, the more confusing it got.How would you explain the closing process to Anne Marie?

She also asked about dividends.What are they?Will they increase expense?

***USE THE ATTACHED EXCEL DOCUMENT TO ANSWER THE QUESTIONS***

Anne's Beauty Salon, Inc Income Statement For the Year 2015 Sales (Revenue) $ 125,000.00 Cost of Sales $ 25,000.00 Gross Profit $ 100,000.00 Payroll Expense $ 67,500.00 Sales, General, Administrative Expense Rent Expense Utilities Expense Insurance Expense Depreciation Expense Total Operating Expense Total Operating Income Taxes 30% Net Income $ $ $ $ $ $ $ $ $ 5,000.00 1,400.00 1,670.00 500.00 2,500.00 78,570.00 21,430.00 6,430.00 15,000.00 Note, Income Statements should be monthly. This Income Statement is Michael LaFountain: Rounding due to taxes. monthly. This Income Statement is for training purposes, ONLY! Anne's Beauty Salon, Inc Balance Sheet At December 31, 2015 Assets Current Assets Cash Accounts Receivable Supplies Prepaid Rent Prepaid Insurance Total Current Assets Equipment Less: Accumulated Depreciation Total Long-Term Assets Total Assets $ $ $ $ $ $ $ $ 25,000.00 (5,000.00) $ $ $ Liabilities Current Liabilities 949.50 Accounts Payable 11,948.00 Unearned Revenue 20,500.00 Total Current Liabilities 8,400.00 6,000.00 47,797.50 Note Payable Total Liabilities 20,000.00 Stockholders' Equity 20,000.00 Common Stock Retained Earnings 67,797.50 Total Liabilities and Stockholders' Equity $ $ $ 5,000.00 200.00 5,200.00 $ $ 15,000.00 20,200.00 $ $ $ 30,000.00 17,597.50 67,797.50 Anne's Beauty Salon, Inc Statement of Retained Earnings For the Month Ending December 31, 2015 Retained Earnings, December 1 Add: Net Income Subtract: Dividends Retained Earnings, December 31 $ $ $ $ 5,000.00 15,000.00 (2,402.50) 17,597.50