Preparing Financial Statements and Closing Process

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.

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

c. Set up T-accounts for each account and post the closing entries