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​The Neon Lumber Company uses the periodic inventory method, and it has a policy of adjusting and closing its books only at year end. The following adjusted trial balance for the company was prepared after posting the normal adjusting entries on December

The Neon Lumber Company uses the periodic inventory method, and it has a policy of adjusting and closing its books only at year end. The following adjusted trial balance for the company was prepared after posting the normal adjusting entries on December 31, 2020:

Account TitleDebitCredit
Cash66,240
Accounts Receivable140,500
Merchandise Inventory, January 1, 2020289,620
Supplies on Hand5,200
Prepaid Insurance4,800
Prepaid Rent56,000
Equipment92,000
Accumulated Depreciation
16,460
Accounts Payable
96,800
Capital Stock
50,000
Retained Earnings, January 1, 2020

456,210

Dividends4,000
Sales
910,120
Sales Discounts4,220
Sales Returns and Allowances6,530
Interest Revenue
820
Purchases624,440
Purchase Discounts
4,650
Purchase Returns and Allowances
2,400
Transportation In9,420
Advertising Expense36,840
Sales Salaries Expense120,550
Administrative Salaries Expense60,300
Utilities Expense9,560
Delivery Expenses (Freight Out)2,610
Legal and Accounting Expense3,200
Interest Expense400
Miscellaneous Administrative Expense1,030
Totals1,537,4601,537,460

The ending inventory balance at Dec. 31, 2020 was $280,000.

Required:

A. Following the example on page 242 of the textbook, prepare the income statement for the year ended December 31, 2020. Do your best to distinguish between selling expenses and administrative expenses. Both interest revenue and interest expense, of course, are non-operating items.

B. Using the example on page 249 of the textbook, prepare the statement of retained earnings for the year ended December. 31, 2020.

C. Using the example on page 250 and other locations in the textbook, prepare the balance sheet as of December. 31, 2020.

D. Prepare the closing entries as of December 31,2020

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