Programs Plus is a retail firm that sells computer programs for home and business use. Programs Plus operates in a state with no sales tax. On December 31, 20X1, its general ledger contained the accounts and balances shown below:

ACCOUNTS	BALANCES
Cash	$	15,280	Dr.
Accounts Receivable		26,600	Dr.

The data needed for the adjustments on December 31 are as follows:

a.-b. Ending merchandise inventory, $67,850.

3. Uncollectible accounts, 0.5 percent of net credit sales of $245,000.
4. Supplies on hand December 31, $1,020.
5. Expired insurance, $1,190.
6. Depreciation ExpenseEquipment, $5,600.
7. Accrued interest expense on notes payable, $325.
8. Accrued salaries, $2,100.
9. Social Security Tax Payable (6.2 percent) and Medicare Tax Payable (1.45 percent) of accrued salaries.

The following accounts had zero balances:

• Salaries Payable
• Interest Payable
• Income Summary
• Supplies Expense
• Insurance Expense
• Depreciation ExpenseEquipment
• Uncollectible Accounts Expense

Required:

1. Prepare a worksheet for the year ended December 31, 20X1.
2. Prepare a classified income statement. The firm does not divide its operating expenses into selling and administrative expenses.
3. Prepare a statement of owners equity. No additional investments were made during the period.
4. Prepare a classified balance sheet. All notes payable are due within one year.
5. Journalize the adjusting entries.
6. Journalize the closing entries.
7. Journalize the reversing entries.

Analyze:

By what percentage did the owners capital account change in the period from January 1, 20X1, to December 31, 20X1?