Financial & Managerial Accounting 17th Edition by Jan Williams ,Susan Haka,Mark Bettner,Joseph Carcello

تمرين 14

Preparing Closing Entries and an After-Closing Trial Balance
Refer to the adjusted trial balance of Wilderness Guide Services, Inc., illustrated in Exercise 5.3 to respond to the following items:
a. Prepare all necessary closing entries at December 31, 2015.
b. Prepare an after-closing trial balance dated December 31, 2015.
c. Compare the Retained Earnings balance reported in the after-closing trial balance prepared in part b to the balance reported in the adjusted trial balance. Explain why the two balances are different. (Include in your explanation why the balance reported in the after-closing trial balance has increased or decreased subsequent to the closing process.)
Exercise 5.3
Financial Statement Preparation
Wilderness Guide Services, Inc., performs adjusting entries every month, but closes its accounts only at year-end. The company's year-end adjusted trial balance dated December 31, 2015, follows:

a. Prepare an income statement and statement of retained earnings for the year ended December 31, 2015. Also prepare the company's balance sheet dated December 31, 2015. (Hint: Unprofitable companies have no income taxes expense.)
b. Does the company appear to be liquid? Defend your answer.
c. Has the company been profitable in the past? Explain.