Using the information from P 2–8, prepare and complete a worksheet similar to Illustration 2A–1. Use the information in the worksheet to prepare an income statement and a statement of shareholders’ equity for 2021 and a balance sheet as of December 31, 2021. Cash dividends paid to shareholders during the year amounted to $6,000. Also prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts.

P 2–8

Account Title Debits Credits Cash 23,300 Accounts receivable 32,500 Supplies Prepaid rent Inventory Office equipment Accumulated depreciation Accounts payable Salaries payable Notes payable Common stock Retained earnings -0- -0- 65,000 75,000 10,000 26,100 3,000 30,000 80,000 22,050 Dividends 6,000 Sales revenue 180,000 Cost of goods sold 95,000 -0- Interest expense Salaries expense Rent expense Supplies expense Utilities expense 32,350 14,000 2,000 6,000 Totals 351,150 351,150