Big Dog Company Began Operations on January 1, 2012

Essay

Big Dog Company began operations on January 1, 2012. The accountant for Big Dog has recorded the closing entries in the general journal at the company's year-end, December 31, 2012. In addition, the closing entries have been created in the computerized general ledger and the computer has generated a year-end trial balance. Since the closing entries have already been posted, the income statement that the computer printed has the proper account names, but all accounts have zero balances. In addition, the statement of retained earnings shows net income and dividends equal to zero instead of the correct 2012 net income and dividends. As you examine the general journal, you find the closing entries below:
In good form, prepare a statement of retained earnings for the year ended December 31, 2012. The beginning balance of retained earnings is zero.