The following account balances are taken from the general ledger of Whitni Corporation on December 31, 2011, the end of its fiscal year. The corporation was organized January 2, 2005.

Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 40,250

Notes Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,500

Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63,000

Allowance for Bad Debts (credit balance) . . . . . . . . . . . . . . . . . . . 650

Inventory, December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94,700

Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000

Buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247,600

Accumulated Depreciation—Buildings . . . . . . . . . . . . . . . . . . . . . 18,000

Furniture and Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000

Accumulated Depreciation—Furniture and Fixtures . . . . . . . . . . . 9,000

Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000

Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,700

Common Stock, $100 par . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,000

Retained Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129,125

Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 760,000

Sales Returns and Allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17,000

Cost of Goods Sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465,800

Utilities Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,700

Property Tax Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,200

Salaries and Wages Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,000

Sales Commissions Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,925

Insurance Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,000

Interest Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,600

Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400

Data for adjustments at December 31, 2011, are as follows:

(a) Depreciation (to nearest month for additions): furniture and fixtures, 10%; buildings, 4%.

(b) Additions to the buildings costing $150,000 were completed June 30, 2011.

(c) Allowance for Bad Debts is to be increased to a balance of $2,500.

(d) Accrued expenses: sales commissions, $700; interest on notes payable, $45; property taxes, $6,000.

(e) Prepaid expenses: insurance, $3,200.

(f) Accrued revenue: interest on notes receivable, $750.

(g) The following information is also to be recorded:

(1) On December 30, the board of directors declared a quarterly dividend of $1.50 per share on common stock, payable January 25, 2012, to stockholders of record January 15, 2012.

(2) Income taxes for 2011 are estimated at $15,000.

(3) The only charges to Retained Earnings during the year resulted from the declaration of the regular quarterly dividends.

Instructions:

1. Prepare an 8-column spreadsheet. There should be a pair of columns each for trial balance, adjustments, income statement, and balance sheet.

2. Prepare all the journal entries necessary to record the effects of the foregoing information and to adjust and close the books of the corporation.