The adjusted trial balance columns of the worksheet for Rachel Company, owned by Toni Rachel, are as follows.

Instructions

(a) Complete the worksheet by extending the balances to the financial statement columns.

(b) Prepare an income statement, owner’s equity statement, and a classified balance sheet. (Note: $9,000 of the notes payable become due in 2011.) Toni Rachel did not make any additional investments in the business during the year.

(c) Prepare the closing entries. Use J14 for the journal page.

(d) Post the closing entries. Use the three-column form of account. Income Summary is No. 350.

(e) Prepare a post-closing trial balance.

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RACHEL COMPANY Worksheet For the Year Ended December 31, 2010 Adjusted Trial Balance Account Cr. No. Dr. Account Titles 101 Cash 8,100 112 Accounts Receivable 10,800 1,500 126 Supplies Prepaid Insurance Office Equipment Accumulated Depreciation-Office Equipment Notes Payable Accounts Payable Salaries Payable Interest Payable T. Rachel, Capital T. Rachel, Drawing 130 2,000 151 24,000 152 5,600 200 15,000 201 6,100 212 2,400 230 600 301 15,800 306 7,000 400 Service Revenue 61,000 610 Advertising Expense Supplies Expense Depreciation Expense Insurance Expense Salaries Expense Interest Expense 8,400 4,000 5,600 631 711 722 3,500 726 31,000 905 600 106,500 Totals 106,500