Financial Accounting I (2022/23)
EXERCISE 10R. LESSON 4. CLOSING THE BOOKS
The following financial information was taken from the accounting books of HISPANO
Corporation in thousand euros.
Account balances as of December 31, year 3
Accounts Type of Account Amount DrB CrB
Accounts receivable asset 320
Accounts payable liabilities 300
Advertising expense expense 100
Cash asset x
Notes receivable asset 880
Share capital equity 800
Interest expense pyg 336
Equipment liability 700
Interest receivable asset 16
Interest revenue pyg 112
Notes payable liabiilities 400
Advances to employees asset 128
Rent expense pyg 312
Reserves equity 576
Salaries expense pyg 1,280
Salaries payable liabilities 472
Service revenue revenue 1,860
Office Supplies asset 16
Supplies expense expense 100 debit
TOTALS
Work to do:
a. Calculate the missing data.
b. Prepare the necessary closing entries at the end of year 3 for HISPANO Corporation.
c. What is the balance of the account “Profit or loss for the period” after closing the
temporary accounts?
d. Prepare the Income Statement for year 3 and the Balance Sheet as of December 31,
year 3. In the Income Statement, calculate the results from operating activities and the
results from financial activities. In the Balance Sheet, calculate total assets, total
liabilities and total equity (no other breakdown is needed).
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