able 285,000   Prepaid rent 8,500   Inventory 42,000   Office equipment 520,000   Accumulated depreciation   $  218,000 Accounts payable   54,000 Notes payable (due in six months)   36,000 Salaries payable   6,700 Interest payable   1,200 Common stock   400,000 Retained earnings   110,000 Sales revenue   670,000 Cost of goods sold 402,000   Salaries expense 100,500   Rent expense 25,500   Depreciation expense 52,000   Interest expense 2,400   Advertising expense 3,400   Totals $ 1,495,900 $ 1,495,900

College Accounting (Book Only): A Career Approach
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Chapter12: Financial Statements, Closing Entries, And Reversing Entries
Section: Chapter Questions
Problem 4PB: The following accounts appear in the ledger of Sheldon Company on January 31, the end of this fiscal...
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The December 31, 2024, adjusted trial balance for the Blueboy Cheese Corporation is presented below.

Account Title Debits Credits
Cash $ 54,600  
Accounts receivable 285,000  
Prepaid rent 8,500  
Inventory 42,000  
Office equipment 520,000  
Accumulated depreciation   $  218,000
Accounts payable   54,000
Notes payable (due in six months)   36,000
Salaries payable   6,700
Interest payable   1,200
Common stock   400,000
Retained earnings   110,000
Sales revenue   670,000
Cost of goods sold 402,000  
Salaries expense 100,500  
Rent expense 25,500  
Depreciation expense 52,000  
Interest expense 2,400  
Advertising expense 3,400  
Totals $ 1,495,900 $ 1,495,900

Required:

1-a. Prepare an income statement for the year ended December 31, 2024.

1-b. Prepare a classified balance sheet as of December 31, 2024.

2. Prepare the necessary closing entries on December 31, 2024.

Expert Solution
Step 1

MAIN SOLUTION: 

1-a. Prepare an income statement for the year ended December 31, 2024.

PARTICULARS   AMOUNT
sales revenue   670,000
LESS:    
        cost of goods sold 402000  
        salaries expense 100500  
        rent expense 25500  
        depreciation expense 52000  
        interest expense 2400  
         advertising expense 3400 585800
NET INCOME   84200
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