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 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:important financial information like assets, liabilities, revenues and expenses Balance Sheet Income statement Statement of retained earnings 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, 2018.

BuyFind

Corporate Financial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781305653535
BuyFind

Corporate Financial Accounting

14th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781305653535

Solutions

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 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:important financial information like assets, liabilities, revenues and expenses

  • Balance Sheet
  • Income statement
  • Statement of retained earnings
  • 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, 2018.

(2)

To determine

To Prepare: The statement of retained earnings for the year ended December 31, 2018.

(3)

To determine

To Prepare: The balance sheet of Company L at December 31, 2018.

(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, 2018

Want to see the full answer?

Check out a sample textbook solution.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.