The adjusted trial balance of Charon Repairs on December 31, 2009, follows....

The adjusted trial balance of Charon Repairs on December 31, 2009, follows.

Required

1. Prepare an income statement and a statement of owner’s equity for the year 2009, and a classified balance sheet at December 31, 2009. There are no owner investments in 2009.

2. Enter the adjusted trial balance in the first two columns of a six-column table. Use columns three and four for closing entry information and the last two columns for a post-closing trial balance. Insert an Income Summary account as the last item in the trial balance.

3. Enter closing entry information in the six-column table and prepare journal entries for it.

Analysis Component

4. Assume for this part only that

a. None of the $800 insurance expense had expired during the year. Instead, assume it is a prepayment of the next period’s insurance protection.

b. There are no earned and unpaid wages at the end of the year. (Hint: Reverse the $1,400 wages payable accrual.) Describe the financial statement changes that would result from these two assumptions.