Problem 3: Closing entries and preparing Financial Statements

Funky Beat Studio provides music lessons to student musicians. Some students pay in advance for lessons; others are billed after lessons have been already provided and the amounts are credited to Lessons revenue. The advanced payments are credited to an account entitled Unearned revenue. FUNKY BEAT STUDIO ADJUSTED TRIAL BALANCE DECEMBER 31, 2020

Cash	$20800
Account receivable	$2100
Unexpired insurance	$3200
Prepaid Rent	$6000
Sheet music supplies	$450
Music Equipment	$180000
Accumulated depreciation: music equipment		$72000
Accounts payable		$3500
Notes payable		$5000
Dividends payable		$1000
Interest payable		$25
Income taxes payable		$3400
Unearned revenue		$1100
Capital Stock		$20000
Retained earnings		$56000
Dividend	$1000
Lesson revenue		$159375
Advertising expense	$7400
Insurance expense	$4400
Rent expense	$16500
Sheet music supplies expense	$780
Utilities expense	$5000
Depreciation expense: music equipment	$33000
Salaries expense	$27500
Interest expense	$25
Income tax expense	$13845
Total	$322,200	$322,200

From the adjusted trial balance dated December 31, 2020, provided above, complete the following:

1. Prepare all the closing entries for the company.

2. Prepare the Income Statement dated 31/12/20.

3. Prepare a Statement of Retained Earnings dated 31/12/2020.

4. Prepare the companys Balance Sheet dated 31/12/2020.