Santo Company’s adjusted trial balance on December 31 follows.

Required
1. Prepare an income statement and a statement of retained earnings for the year, and a classified balance sheet at December 31. 

The Retained Earnings account balance was $25,650 on December 31 of the prior year.

2. Prepare the December 31 closing entries.

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No. Account Title 101 Cash.... 125 Store supplies... Prepaid insurance 128 167 Equipment .. 168 Accumulated depreciation-Equipment... Adjusted Trial Balance December 31 201 Accounts payable..... 210 Wages payable.... 307 Common stock..... 318 Retained earnings 319 Dividends..... 403 Services revenue 612 623 637 640 651 690 Depreciation expense-Equipment..... Wages expense Insurance expense. Rent expense.. Store supplies expense. Utilities expense... Totals...... Debit $ 14,450 5,140 1,200 31,000 15,000 Credit $ 8,000 1,500 2,700 10,000 25,650 54,700 2,000 26,400 600 3,600 1,200 1,960 $102,550 $102,550