The accountant of the marketing firm, S. Preston, has posted adjusting entries (1) to (5) to the ledger accounts at 30 June 2016. All the income, expense and equity accounts of the entity are listed here in T-account form.

Required

A. Prepare the closing entries of the marketing firm at 30 June 2016.

B. Prepare the income statement and the statement of changes in equity for the year ended 30 June 2016.

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Salaries Payable Accounts Receivable Supplies 31 500 33 500 (1) 26 000 (4) 4 400 (5) 20 000 S. Preston, Drawings S. Preston, Capital Service Revenue 67 500 36 000 166 500 (5) 20 000 Depr. Expense – Salaries Expense Buildings Supplies Expense 78 000 (1) 26 000 (3) 24 000 (4) 4 400 Accum. Depr. - Accum. Depr. – Depr. Expense – Buildings Furniture Furniture 6 500 (2) 5 600 96 000 (3) 24 000 (2) 5 600