Interim Reporting Jersey Company is in the process of developing its first-quarter interim report. It has developed the following condensed trial balance as of March 31, 2007:

Additional information:
1. The company makes formal adjusting entries at year-end and enters the amounts in the appropriate accounts at that time.
2. The company uses control accounts for selling expenses and for general and administrative expenses.
3. Uncollectible accounts typically average 1% of net sales.
4. On January 1, 2007, buildings and equipment (net) have an average remaining life of 10 years. One-third of the account balance consists of assets related to selling activities. The company uses straight-line depreciation with no residual value.
5. The note receivable is dated January 1, 2007, matures on January 1, 2009, and carries an annual interest rate of 12% (interest will not be collected until the maturity date).
6. On January 1, 2007, the company had purchased a 3-year insurance policy, debiting Prepaid Insurance for the $4,800 payment.
7. The company expects its annual effective income tax rate to be 30%. Income taxes for 2007 will be paid at the beginning of 2008.
8. No common stock has been issued or retired in 2007.

Required
On the basis of the preceding information, prepare the Jersey Company income statement for the first quarter of 2007 and a March 31, 2007 balance sheet. A worksheet is not required, but you should be prepared to document any adjustments you make to the precedingaccounts.

Debit Credit Cash Accounts receivable (net) Inventory Prepaid insurance Note receivable S 900 4,000 8,500 4,800 6,000 3,000 36,000 Buildings and equipment (net) Accounts payable Common stock, $1 par Premium on common stock Retained earnings (1/1/07) Sales (net) Cost of goods sold Selling expenses General and administra $ 9,100 6,000 12,400 23,080 50,000 26,500 6,500 4,380 $100,580 100,580