QUESTION
Exercise 2-12 (Algo) Financial statements and closing entries [LO2-7, 2-8]
The December 31, 2021, adjusted trial balance for the Blueboy
Cheese Corporation is presented below.
Account Title | Debits | Credits | |
Cash | 38,800 | ||
Accounts receivable | 310,000 | ||
Prepaid rent | 11,000 | ||
Inventory | 46,000 | ||
Office equipment | 560,000 | ||
Accumulated depreciation | 234,000 | ||
Accounts payable | 64,000 | ||
Notes payable (due in six months) | 48,000 | ||
Salaries payable | 7,100 | ||
Interest payable | 1,600 | ||
Common stock | 400,000 | ||
Retained earnings | 130,000 | ||
Sales revenue | 710,000 | ||
Cost of goods sold | 426,000 | ||
Salaries expense | 106,500 | ||
Rent expense | 33,000 | ||
Depreciation expense | 56,000 | ||
Interest expense | 3,200 | ||
Advertising expense | 4,200 | ||
Totals | 1,594,700 | 1,594,700 | |
Required:
1-a. Prepare an income statement for the year
ended December 31, 2021.
1-b. Prepare a classified balance sheet as of
December 31, 2021.
2. Prepare the necessary closing entries at
December 31, 2021.