Goldsmith Company’s adjusted trial balance on December 31, 2009, follows. Re...

Goldsmith Company’s adjusted trial balance 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 the middle two columns for closing entry information and the last two columns for a post-closing trial balance. Insert an Income Summary account (No. 901) 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 $1,000 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 $1,300 wages payable accrual.) Describe the financial statement changes that would result from these two assumptions.