On November 30, 2007 the Zu Company had the following account balances:

During the month of December the Zu Company entered into the following transactions:
Date Transaction_____________________________
Dec. 4 Made cash sales of $3,000; the cost of the inventory sold was $1,800.
7 Purchased $2,400 of inventory on credit.
11 Customer returned $600 (retail price) of inventory for credit to its account; the cost of the inventory returnedwas $360.
14 Collected $900 of accounts receivable.
18 Sold land for $7,800; the land originally had cost $5,000.
20Made credit sales of $4,000; the cost of the inventory sold was $2,400.
21Returned $360 of defective inventory to supplier for credit to the Zu Company's account and reduced the inventory account.
27 Purchased $1,250 of inventory for cash.
28 Paid $1,100 of accounts payable.
31 Purchased land at a cost of $6,000; made a $1,000 down payment and signed a 12%, two-year note for the balance.

Required
1. Prepare general journal entries to record the preceding transactions.
2. Post to the general ledger accounts.
3. Prepare a year-end trial balance on a worksheet and complete the worksheet using the following information:
(a) Accrued salaries at year-end total $1,200;
(b) For simplicity, the building and equipment are being depreciated using the straight-line method over an estimated life of 20 years with no residual value;
(c) Supplies on hand at the end of the year total $630;
(d) Bad debts expense for the year totals $830; and
(e) The income tax rate is 30%; income taxes are payable in the first quarter of 2008.
4. Prepare the company's financial statements for 2007.
5. Prepare the 2007 (a) adjusting and (b) closing entries in the generaljournal.

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Debit $ 3,090 9.900 Credit Deb Capital stock, no-par (2,000 shares) Retained earmings (1/1/2007) it Credit $20,000 42,400 Accounts receivable Allowance for doubtful accounts Inventory Supplies $100 Dividends distributed $2,000 17,750 1,400 9,000 42,000 76,000 Sales returns Cost of goods sold Salaries expense Buildings and equipment Accumulated depreciation Accounts payable 36,860 12,500 8,100 4,500 4,200 Advertising expense 10,700 Other expenses