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:

ACCOUNTSBALANCESCash$33,280Dr.Accounts Receivable44,600Dr.Allowance for Doubtful Accounts185Cr.Merchandise Inventory80,375Dr.Supplies8,540Dr.Prepaid Insurance5,980Dr.Equipment52,000Dr.Accumulated Depreciation?Equipment19,100Cr.Notes Payable9,064Cr.Accounts Payable10,100Cr.Social Security Tax Payable1,460Cr.Medicare Tax Payable310Cr.Yasser Tousson, Capital111,620Cr.Yasser Tousson, Drawing50,000Dr.Sales550,980Cr.Sales Returns and Allowances16,800Dr.Purchases324,830Dr.Freight In5,400Dr.Purchases Returns and Allowances10,745Cr.Purchases Discounts63,180Cr.Rent Expense32,500Dr.Telephone Expense3,064Dr.Salaries Expense110,000Dr.Payroll Taxes Expense9,100Dr.Interest Expense275Dr.

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

a.-b.Ending merchandise inventory, $69,650.

1. Uncollectible accounts, 0.5 percent of net credit sales of $263,000.
2. Supplies on hand December 31, $1,920.
3. Expired insurance, $2,990.
4. Depreciation Expense?Equipment,$12,800.
5. Accrued interest expense on notes payable, $2,125.
6. Accrued salaries, $5,700.
7. Social Security Tax Payable(6.2percent) andMedicare Tax Payable(1.45percent) of accrued salaries.

The following accounts had zero balances:

• Salaries Payable
• Interest Payable
• Income Summary
• Supplies Expense
• Insurance Expense
• Depreciation Expense?Equipment
• 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 owner's 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 owner's capital account change in the period from January 1, 20X1, to December 31, 20X1?