Preparing Financial Statements and Closing Entries Beneish Company has the following account balances at December 31, the end of its fiscal year.

	Debit	Credit
Cash	$ 8,000
Accounts receivable	6,500
Equipment	78,000
Accumulated depreciation		$14,000
Notes payable		10,000
Common stock		43,000
Retained earnings		20,600
Dividends	8,000
Service fees earned		75,000
Rent expense	18,000
Salaries expense	37,100
Depreciation expense	7,000
Totals	$162,600	$162,600

(a) Prepare Beneish Corporation's income statement and statement of stockholders' equity for year-end December 31, and its balance sheet as of December 31. There were no stock issuances or repurchases during the year. (Do not use negative signs with your answers unless otherwise noted.)

Beneish Corporation Income Statement For Year Ended December 31
AnswerCashRetained earningsService fees earnedDividendsNotes Payable	Answer
Rent expense	Answer
Salaries expense	Answer
Depreciation expense	Answer
Net income	Answer

Note: Use a negative sign for any answer that decreases the balance.

Beneish Corporation Statement of Stockholders' Equity For Year Ended December 31
	Common Stock	Retained Earnings	Total Stockholders' Equity
Balance at December 31, Beg	Answer	Answer	Answer
Stock issuance	Answer	Answer	Answer
AnswerCashNotes PayableDividendsRetained earningsService fees earned	Answer	Answer	Answer
Net income	Answer	Answer	Answer
Balance at December 31, End	Answer	Answer	Answer

Note: Use a negative sign with your accumulated depreciation answer.

Beneish Corporation

Balance Sheet

December 31

Assets

Liabilities

AnswerRetained earningsService fees earnedCashNotes PayableDividends	Answer
Accounts receivable	Answer
Equipment, gross	Answer
Accumulated depreciation	Answer
Equipment, net	Answer
Total assets	Answer

AnswerCashNotes PayableRetained earningsService fees earnedDividends	Answer
Total liabilities	Answer
Common stock	Answer
AnswerCashDividendsNotes payableService fees earnedRetained earnings	Answer
Total liabilities and equity	Answer

(b) Prepare journal entries to close Beneish's temporary accounts.

GENERAL JOURNAL
Ref.	Description	Debit	Credit
(1)	AnswerRetained EarningsService Fees EarnedStock issuanceCashDividends	Answer	Answer
	AnswerRetained EarningsService Fees EarnedStock issuanceCashDividends	Answer	Answer
	To close revenue account.
(2)	AnswerDividendsService Fees EarnedRent ExpenseRetained EarningsStock issuance	Answer	Answer
	AnswerDividendsService Fees EarnedRent ExpenseRetained EarningsStock issuance	Answer	Answer
	To close rent expense account.
(3)	AnswerRetained EarningsDividendsSalaries ExpenseStock issuanceService Fees Earned	Answer	Answer
	AnswerRetained EarningsDividendsSalaries ExpenseStock issuanceService Fees Earned	Answer	Answer
	To close salaries expense account.
(4)	AnswerStock issuanceRetained EarningsService Fees EarnedDepreciation ExpenseDividends	Answer	Answer
	AnswerStock issuanceRetained EarningsService Fees EarnedDepreciation ExpenseDividends	Answer	Answer
	To close depreciation expense account.
(5)	AnswerService Fees EarnedCashRetained EarningsStock issuanceDividends	Answer	Answer
	AnswerService Fees EarnedCashRetained EarningsStock issuanceDividends	Answer	Answer
	To close dividend account.

(c) Set up T-accounts for each account and post the closing entries. Note: Only those ledger accounts affected by closing process are shown here.

• Enter beginning balances in the appropriate answer box.

• Enter transactions in the T-accounts in the order they appear, using first available answer box on the appropriate side of the T-account.

• Compute the ending balances.

Retained Earnings
	Answer	Answer	Beg Bal.
	Answer	Answer
	Answer	Answer
	Answer	Answer
	Answer	Answer	End Bal.

Service Fees Earned
	Answer	Answer	Beg Bal.
	Answer	Answer	End Bal.

Rent Expense
Beg Bal.	Answer	Answer
End Bal.	Answer	Answer

Depreciation Expense
Beg Bal.	Answer	Answer
End Bal.	Answer	Answer

Salaries Expense
Beg Bal.	Answer	Answer
End Bal.	Answer	Answer

Dividends
Beg Bal.	Answer	Answer
End Bal.	Answer	Answer