The Stern Company uses a perpetual inventory system and has prepared the following adjusted trial balance on December 31, 2007:

Required
Prepare in proper form for 2007 the company's:
(1) Income statement,
(2) Retained earnings statement,
(3) Ending balance sheet, and
(4) Closing entries in its generaljournal.

Transcribed Image Text:

Debit S 2,000 Credit Cash Accounts receivable Allowance for doubtful accounts Inventory Prepaid insurance Land Buildings and equipment Accumulated depreciation Accounts payable Salaries payable Unearned rent Income taxes payable Note payable (due July 1, 2011) Interest payable (due luly 1, 2011) Capital stock (1,500 shares) Retained earnings, January 1, 2007 Dividends distributed Sales revenue Sales returns Rent revenue Cost of goods sold Selling expenses Administrative expenses Interest expense Income tax expense 2,700 $ 250 6,500 800 5,200 31,000 15,000 3,100 420 360 2,625 5,000 750 9,000 6,770 1,200 33,000 2,100 1,440 15,040 4,800 3,000 750 2,625 Totals $77.15 $77,715