Question

The December 31, 2021, adjusted trial balance for the Blueboy Cheese Corporation is presented below.

Account Title	Debits		Credits
Cash	57,300
Accounts receivable	280,000
Prepaid rent	8,000
Inventory	41,000
Office equipment	510,000
Accumulated depreciation			214,000
Accounts payable			52,000
Notes payable (due in six months)			33,000
Salaries payable			6,600
Interest payable			1,100
Common stock			400,000
Retained earnings			105,000
Sales revenue			660,000
Cost of goods sold	396,000
Salaries expense	99,000
Rent expense	24,000
Depreciation expense	51,000
Interest expense	2,200
Advertising expense	3,200
Totals	1,471,700		1,471,700

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.

Answer 1

la) $ $ $ 660,000 396,000 264,000 Blueboy Cheese Corporation Income Statement For the Year Ended December 31,2021 Sales Revenue Cost of Good Sold Gross Profit Operating Expenses Salaries Expense $ 99,000 Rent Expense $ 24,000 Depreciation Expense $ 51,000 Advertising expense $ 3,200 Total Operating Expenses Operating Income Other Income (Expense) Interest expenses Net Income $ $ 177,200 86,800 $ $ (2,200) 84,600 (lb) Blueboy Cheese Corporation Balance Sheet As on December 31,2021 Assets Current assets Cash Accounts Receivables Inventory Prepaid rent Total Current assets $ $ $ $ $ 57,300 280,000 41,000 8,000 386,300

Property and equipmenet Office Equipment $ 510,000 Less: accumulated Depreciation $ 214,000 $ 296,000 Total assets S 682,300 Liabilities and Shareholders' Equity Current Liabilities Accounts Payable $ 52,000 Salaries payable $ 6,600 Interest payable $ 1,100 Note payable $ 33,000 Total current liabilities $ 92,700 Shareholders' equity: Common Stock $ 400,000 Retained Earnings $ 189,600 Total shareholders' equity $ 589,600 Total liabilities and shareholders' equity S 682,300 Note: Retained Earnings Closing balance = Opening + Net Income- Dividends paid = $105,000+$84,600-$0 = $189,600 2 Credit Debit $ 660,000 Date Account Titles and Explanation Dec. 31,2021 Sales revenue Income summary (Being sales revenue Clsoed recorded) $ 660,000

$575,400 Dec. 31,2021 Income summary Cost of goods sold Salaries expense Rent expense Depreciation expense Interest expense Advertising Expense (Being Expenses accounts closed recorded) $ $ $ $ $ $ 396,000 99,000 24,000 51,000 2,200 3,200 $ 84,600 Dec. 31.2021 Income summary Retained earnings (Being Net Income closed recorded) $ 84,600