The December 31, 2021, adjusted trial balance for the Blueboy Cheese Corporation is presented below. Account Title Debits Credits Cash 51,900 Accounts receivable 290,000 Prepaid rent 9,000 Inventory 43,000 Office equipment 530,000 Accumulated depreciation 222,000 Accounts payable 56,000 Notes payable (due in six months) 39,000 Salaries payable 6,800 Interest payable 1,300 Common stock 400,000 Retained earnings 115,000 Sales revenue 680,000 Cost of goods sold 408,000 Salaries expense 102,000 Rent expense 27,000 Depreciation expense 53,000 Interest expense 2,600 Advertising expense 3,600 Totals 1,520,100 1,520,100 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.

Question

Business

Dominique Wang

7 September, 06:31

The December 31, 2021, adjusted trial balance for the Blueboy Cheese Corporation is presented below. Account Title Debits Credits Cash 51,900 Accounts receivable 290,000 Prepaid rent 9,000 Inventory 43,000 Office equipment 530,000 Accumulated depreciation 222,000 Accounts payable 56,000 Notes payable (due in six months) 39,000 Salaries payable 6,800 Interest payable 1,300 Common stock 400,000 Retained earnings 115,000 Sales revenue 680,000 Cost of goods sold 408,000 Salaries expense 102,000 Rent expense 27,000 Depreciation expense 53,000 Interest expense 2,600 Advertising expense 3,600 Totals 1,520,100 1,520,100 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.

+2

Answers (1)

Know the Answer?

Elise Boyd · Answer 1

Blueboy Cheese Corporation

Income Statement

December 31, 2021

Account Title Debits Credits

Sales revenue 680,000

Less Cost of goods sold 408,000

Gross Profit 272,000

less

Salaries expense 108,800

Rent expense 18,000

Depreciation expense 53,000

Interest expense 3,900

Advertising expense 3,600

Un adjusted Profit 84,700

Adjusted Profit 82,900

Blueboy Cheese Corporation

Balance Sheet

December 31, 2021

Account Title Debits Credits

Cash 51,900

Accounts receivable 290,000

Inventory 43,000

Office equipment 308,000

Accounts payable 56,000

Notes payable (due in six months) 39,000

Common stock 400,000

Retained earnings 115,000 + 82,900 = 197,900

Total $ 692,900 692,900

Closing Entries

Dec 31 Sales Revenue $680,000 Dr

Income Summary $680,000 Cr

The first closing entry transfers credit balances in revenue (and gain) accounts to the income summary accounts.

Dec 31 Income Summary $ 187,300 Dr

Salaries expense 108,800 Cr

Rent expense 18,000 Cr

Depreciation expense 53,000 Cr

Interest expense 3,900 Cr

Advertising expense 3,600 Cr

The second closing entry transfers debit balances in expense (and loss) to the income summary accounts.

Dec 31 Income Summary $ 82,900

Retained Earnings Accounts $ 82,900

The third entry transfers the balance of income summary account to the owner's capital account or retained earnings account.