Question: The nancial statements of a company are prepared before the

The financial statements of a company are prepared before the closing entries.
Use the annual report of Carnival Corporation for the 2007 fiscal year to answer the following questions. Specifically, look at the Income Statement (Consolidated Statement of Operations) and the Statement of Stockholders’ Equity for the fiscal year ended November 30, 2007. This information can be found in either the annual report or the SEC 10-K filing at by following the links to Investor Relations.
(a) Prepare Carnival’s four closing entries for 2007.
(b) What was the balance of Retained Earnings at the beginning of the fiscal year (December 1, 2007)?
(c) Prepare the T-account for Retained Earnings (start with the balance on December 1, 2006) and post the closing entries you prepared in part (a).
(d) Verify that the ending balance of the Retained Earnings T-account equals the ending balance of Retained Earnings shown on Carnival’s Statement of Stockholders’ Equity for 1999.
(e) Prepare the T-account for Income Summary to verify that its ending balance is zero.

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