Sarda Electrical Servicing began operations two years ago. Its adjusted account balances at December 31, 2014, are listed alphabetically below. The owner, Nymeth Sarda, made a $20,000 investment early in the year just ended December 31, 2014.

Required

1. Prepare an income statement, statement of changes in equity, and classified balance sheet based on the information provided.

2. Prepare the closing entries. 

3. Prepare the post-closing trial balance.

Account                                                                      Account Balance

Accounts payable...........................................................................................................................................                 $ 21,000

Accounts receivable......................................................................................................................................                     10,500

Accumulated depreciation, tools...............................................................................................................                         4,500

Accumulated depreciation, truck...............................................................................................................                       21,000

Cash....................................................................................................................................................................                    5,000

Copyright..........................................................................................................................................................                      5,100

Depreciation expense, tools........................................................................................................................                         2,250

Depreciation expense, truck........................................................................................................................                        3,600

Electrical fees earned....................................................................................................................................                   126,600

Electrical supplies.........................................................................................................................................                     19,000

Insurance expense..........................................................................................................................................                    1,275

Interest expense..............................................................................................................................................                       900

Notes receivable"...........................................................................................................................................                     12,000

Nymeth Sarda, capital...................................................................................................................................                   27,825

Nymeth Sarda, withdrawals........................................................................................................................                     61,500

Notes payable, due August 31, 2016........................................................................................................                      27,000

Notes payable, due June 1, 2015...............................................................................................................                       2,550

Prepaid insurance...........................................................................................................................................                   1,050

Prepaid rent......................................................................................................................................................                   7,200

Rent expense....................................................................................................................................................                 21,000

Salaries expense..............................................................................................................................................                 27,000

Salaries payable..............................................................................................................................................                   3,150

Tools..................................................................................................................................................................                 21,000

Truck..................................................................................................................................................................                 40,500

Unearned electrical fees................................................................................................................................                   5,250

•Assume all account balances are normal.

**$2,000 of the note is due September 15, 2015.

Analysis Component:

Refer to the chapter opening vignette. Kirk Stinchcombe financed growth by reinvesting profits. Is Nymeth Sarda, the owner of Sarda Electrical Servicing, following a similar practice? Explain.