The December 31, 2024, unadjusted trial balance for the Wolkstein Drug Company is presented below. December 31 is the company’s year-end reporting date.

The following year-end adjusting entries are required:
a. Depreciation expense for the year on the equipment is $10,000.
b. Salaries at year-end should be accrued in the amount of $4,000.

Required:
1. Prepare and complete a worksheet similar to Illustration 2A–1.
2. Prepare an income statement for 2024 and a balance sheet as of December 31, 2024.

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Account Title Cash Accounts receivable Prepaid rent Inventory Equipment Accumulated depreciation Accounts payable Salaries payable Common stock Retained earnings Sales revenue Cost of goods sold Salaries expense Rent expense Depreciation expense Utilities expense Advertising expense Totals Debits $ 20,000 35,000 5,000 50,000 100,000 180,000 71,000 30,000 0 12,000 4,000 $ 507,000 Credits $ 30,000 25,000 0 100,000 29,000 323,000 $ 507,000