Question

The December 31, 2021, adjusted trial balance for the Blueboy Cheese Corporation is presented below. ook Hint Account Title Cash Accounts receivable Prepaid rent Inventory Office equipment Accumulated depreciation Accounts payable Notes payable (due in six months) Salaries payable Interest payable Common stock Retained earnings Sales revenue Cost of goods sold Salaries expense Rent expense Depreciation expense Interest expense Advertising expense Totals Debits Credits 63,100 260,000 6,000 37,000 470,000 198,000 44,000 21,000 6,200 700 400,000 80,000 620,000 372,000 93,000 18,000 47,000 1,400 2,400 1,369,900 1,369,900 rences 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

1.-a.	Income Statement
	For the year ended December 31,2021		Amount $
	Sales Revenue		620,000
	Less: Cost of Goods sold		372,000
	Gross Profit		248,000
	Expenses
	Salaries expense	93,000
	Rent Expense	18,000
	Depreciation Expense	47,000
	Advertising Expense	2,400
	Interest Expense	1,400
	Total Expense		161,800
	Net Income		86,200
1-b.	Balance Sheet
	As at December 31,2021		Amount $
	Assets
	Current Assets
	Cash		63,100
	Accounts Receivable		260,000
	Prepaid rent		6,000
	Inventory		37,000
	Total Current Assets		366,100
	Property , Plant & Equipment
	Office Equipment	470,000
	Less: Accumulated Depreciation	198,000	272,000
	Total Assets		638,100
	Liabilities & Stockholder's Equity
	Liabilities
	Notes Payable		21,000
	Accounts Payable		44,000
	Salaries Payable		6,200
	Interest Payable		700
	Total Liabilities		71,900
	Stockholder's Equity
	Common Stock		400,000
	Retained earnings (80,000 + 86,200 )		166,200
	Total Liabilities & Stockholder's Equity		638,100
2.)	Account Titles & Explanation	Debit $	Credit $
	Sales Revenue	620,000
	Cost of goods sold		372,000
	Salaries Expense		93,000
	Rent Expense		18,000
	Depreciation Expense		47,000
	Advertising Expense		2,400
	Interest Expense		1,400
	Income Summary		86,200
	( To close income & expense to Income Summary )
	Income Summary	86,200
	Retained earnings		86,200
	( To close income summary to retained earnings )