Assume your company has the following adjusted account balances at the end of the quarter for all dividend, revenue, and expense accounts. All accounts have a normal debit or credit balance. Financial statements are prepared on a quarterly basis.

Dividends: $14,000

Services Revenue: $100,000

Rent Expense: $9,000

Salaries Expense: $23,000

Utilities Expense: $6,000

Depreciation Expense - Furniture: $18,000

1. Prepare the four closing entries required to close the books at the end of the quarter. Be sure to clearly number each entry and clearly identify debits and credits by using the following format (these sample entries are not related to closing entries and are simply here as a formatting example):

Entry #1 Dr. Cash

Cr. Accounts Receivable

Entry #2 Dr. Wages Expense

Cr. Wages Payable

2. Are the financial statements prepared before or after the closing entries? Use several sentences to explain your answer.

3. Why do companies close the books at the end of the reporting period?