Financial statement A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are: Balance Sheet Income statement Owners’ equity statement Statement of cash flows Closing entries: Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance. Post-Closing Trial Balance : After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal. To Prepare: An income statement for the year ended December 31, 2016.

Question

Locate Gap Inc.’s 2020 Annual Report (for fiscal year 2/2/20-1/30/21) There are 10 sections of questions. You will find the information necessary to answer the questions in “Item 8. Financial Statements and Supplementary Data,” of the report. Read through the questions carefully and answer in the space provided. What are the following amounts at 1/30/21: Total Assets : Total Liabilities: Total Owner’s Equity : At 1/30/21: What is the percentage of debt used to finance Gap? What is the percentage of owner’s equity used to finance Gap? What is the significance of these two percentages?

Answer 1

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 4.1APR

(1)

To determine

Financial statement

A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:

Balance Sheet

Income statement

Owners’ equity statement

Statement of cash flows

Closing entries:

Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance.

Post-Closing Trial Balance:

After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.

To Prepare: An income statement for the year ended December 31, 2016.

(2)

To determine

To Prepare: The statement of owners’ equity for the year ended December 31, 2016.

(3)

To determine

To Prepare: The balance sheet of Company L at December 31, 2016.

(4)

To determine

To Journalize: The closing entries for L Company.

(5)

To determine

To prepare: A post–closing trial balance of Company L for the month ended December 31, 2016.

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Locate Gap Inc.’s 2020 Annual Report (for fiscal year 2/2/20-1/30/21) There are 10 sections of questions. You will find the information necessary to answer the questions in “Item 8. Financial Statements and Supplementary Data,” of the report. Read through the questions carefully and answer in the space provided. What are the following amounts at 1/30/21: Total Assets : Total Liabilities: Total Owner’s Equity : At 1/30/21: What is the percentage of debt used to finance Gap? What is the percentage of owner’s equity used to finance Gap? What is the significance of these two percentages?

Beacon Signals Company maintains and repairs warning lights, such as those found on radio towers and lighthouses. Beacon Signals Company prepared the following end-of-period spreadsheet at December 31, 2019, the end of the fiscal year: Required: Prepare an income statement for the year ended December 31. Prepare a statement of owner’s equity for the year ended December 31. No additional investments were made during the year. Prepare a balance sheet as of December 31. Based upon the end-of-period spreadsheet, journalise the closing entries. Prepare a post-closing trial balance.

The following items were selected from among the transactions completed by Sherwood Co. during the current year:Required:1. Journalize the transactions. Refer to the Chart of Accounts for exact wording of account titles. Assume a 360-day year. Round your answers to the nearest dollar.2. Journalize the adjusting entry for each of the following accrued expenses at the end of the current year (refer to the Chart of Accounts for exact wording of account titles):a. Product warranty cost, $29,000.b. Interest on the nine remaining notes owed to Greenwood Co. Assume a 360-day year.

Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 4.1APR

(1)

To determine

Financial statement

A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:

Balance Sheet

Income statement

Owners’ equity statement

Statement of cash flows

Closing entries:

Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance.

Post-Closing Trial Balance:

After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.

To Prepare: An income statement for the year ended December 31, 2016.

(2)

To determine

To Prepare: The statement of owners’ equity for the year ended December 31, 2016.

(3)

To determine

To Prepare: The balance sheet of Company L at December 31, 2016.

(4)

To determine

To Journalize: The closing entries for L Company.

(5)

To determine

To prepare: A post–closing trial balance of Company L for the month ended December 31, 2016.

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Answer 3

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 4.1APR

(1)

To determine

Financial statement

A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:

Balance Sheet

Income statement

Owners’ equity statement

Statement of cash flows

Closing entries:

Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance.

Post-Closing Trial Balance:

After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.

To Prepare: An income statement for the year ended December 31, 2016.

(2)

To determine

To Prepare: The statement of owners’ equity for the year ended December 31, 2016.

(3)

To determine

To Prepare: The balance sheet of Company L at December 31, 2016.

(4)

To determine

To Journalize: The closing entries for L Company.

(5)

To determine

To prepare: A post–closing trial balance of Company L for the month ended December 31, 2016.

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Answer 4

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 4, Problem 4.1APR

(1)

To determine

Financial statement

A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:

Balance Sheet

Income statement

Owners’ equity statement

Statement of cash flows

Closing entries:

Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance.

Post-Closing Trial Balance:

After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.

To Prepare: An income statement for the year ended December 31, 2016.

(2)

To determine

To Prepare: The statement of owners’ equity for the year ended December 31, 2016.

(3)

To determine

To Prepare: The balance sheet of Company L at December 31, 2016.

(4)

To determine

To Journalize: The closing entries for L Company.

(5)

To determine

To prepare: A post–closing trial balance of Company L for the month ended December 31, 2016.

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Answer 5

Chapter 4, Problem 4.1APR

(1)

To determine

Financial statement

A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:

Balance Sheet

Income statement

Owners’ equity statement

Statement of cash flows

Closing entries:

Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance.

Post-Closing Trial Balance:

After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.

To Prepare: An income statement for the year ended December 31, 2016.

(2)

To determine

To Prepare: The statement of owners’ equity for the year ended December 31, 2016.

(3)

To determine

To Prepare: The balance sheet of Company L at December 31, 2016.

(4)

To determine

To Journalize: The closing entries for L Company.

(5)

To determine

To prepare: A post–closing trial balance of Company L for the month ended December 31, 2016.

Answer 6

Chapter 4, Problem 4.1APR

(1)

To determine

Financial statement

A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:

Balance Sheet

Income statement

Owners’ equity statement

Statement of cash flows

Closing entries:

Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance.

Post-Closing Trial Balance:

After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.

To Prepare: An income statement for the year ended December 31, 2016.

Answer 7

Chapter 4, Problem 4.1APR

(1)

To determine

Financial statement

A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:

Balance Sheet

Income statement

Owners’ equity statement

Statement of cash flows

Closing entries:

Closing entries are recorded in order to close the temporary accounts such as incomes and expenses by transferring them to the permanent accounts. It is passed at the end of the accounting period, to transfer the final balance.

Post-Closing Trial Balance:

After passing all the journal entries and the closing entries of the permanent accounts and then further posting them to each of the respective accounts, a post-closing trial balance is prepared which consists of a list of all the permanent accounts. A post-closing trial balance serves as an evidence to prove that the balance of the permanent accounts is equal.

To Prepare: An income statement for the year ended December 31, 2016.

Answer 8

(2)

To determine

To Prepare: The statement of owners’ equity for the year ended December 31, 2016.

Answer 9

(2)

To determine

To Prepare: The statement of owners’ equity for the year ended December 31, 2016.

Answer 10

(3)

To determine

To Prepare: The balance sheet of Company L at December 31, 2016.

Answer 11

(3)

To determine

To Prepare: The balance sheet of Company L at December 31, 2016.

Answer 12

(4)

To determine

To Journalize: The closing entries for L Company.

Answer 13

(4)

To determine

To Journalize: The closing entries for L Company.

Answer 14

(5)

To determine

To prepare: A post–closing trial balance of Company L for the month ended December 31, 2016.

Answer 15

(5)

To determine

To prepare: A post–closing trial balance of Company L for the month ended December 31, 2016.

Answer 16

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Ch. 4 - Why do some accountants prepare an end-of-period...Ch. 4 - Describe the nature of the assets that compose the...Ch. 4 - Prob. 3DQ Ch. 4 - Prob. 4DQ Ch. 4 - Why are closing entries required at the end of an...Ch. 4 - What is the difference between adjusting entries...Ch. 4 - What is the purpose of the post-closing trial...Ch. 4 - Prob. 8DQ Ch. 4 - What is the natural business year?Ch. 4 - Prob. 10DQ

Solution Summary: The author explains that a financial statement provides important financial information like assets, liabilities, revenues, and expenses to internal and external users.

To Prepare: The statement of owners’ equity for the year ended December 31, 2016.

To Prepare: The balance sheet of Company L at December 31, 2016.

To Journalize: The closing entries for L Company.

To prepare: A post–closing trial balance of Company L for the month ended December 31, 2016.

Chapter 4 Solutions