Financial Statements The Nealy Company has prepared the following alphabetical adjusted trial balance on December 31, 2007:
|
Debit |
Credit |
|
Income tax expense |
4,035 |
|
Interest expense |
650 |
|
Interest payable (due July 1, 2008) |
650 |
|
Inventory |
10,800 |
|
Land |
6,800 |
|
Notes payable (due July 1, 2011) |
10,000 |
|
Rent revenue |
2,800 |
|
Retained earnings, January 1, 2007 |
14,500 |
|
Sales returns |
4,900 |
|
Sales revenue |
59,800 |
|
Selling expenses |
9,700 |
|
Unearned rent |
700 |
|
Unexpired insurance |
1,600 |
|
Wages payable |
1,000 |
|
$149,485 |
$149,485 |
Required
Prepare the following 2007 items in proper form for the Nealy Company: (1) the income statement, (2) the retained earnings statement, (3) the ending balance sheet, and (4) the closing entries in the general journal. (Hint: For the ending balance sheet, the Capital Stock, Additional Paid in Capital, and Retained Earnings accounts are summed to determine the total stockholders’ equity.)