Presented next is information pertaining to Ward Specialty Foods, a calendar-year sole proprietorship, maintaining its books on the cash basis during the year. At year-end, however, Mary Ward's accountant adjusts the books to the accrual basis only for sales, purchases, and cost of sales, and records depreciation to more clearly reflect the business income.

During 2007, Ward signed a new eight-year lease for the store premises and is in the process of negotiating a loan for remodeling purposes. The bank requires Ward to present financial statements for 2007 prepared on the accrual basis. To do so, Ward's accountant obtained the following additional information:
1. Amounts due from customers totaled $7,900 at December 31, 2007.
2. A review of the receivables at December 31, 2007 disclosed that an allowance for doubtful accounts of $1,100 should be provided. Ward had no bad debt losses from the inception of the business through December 31, 2007.
3. The inventory amounted to $23,000 at December 31, 2007 based on a physical count of goods priced at cost. No reduction to market was required.
4. On signing the new lease on October 1, 2007, Ward paid $8,400 representing one year's rent in advance for the lease year ending October 1, 2008. The $7,500 annual rental under the old lease was paid on October 1, 2006 for the lease year ended October 1, 2007.
5. On April 1, 2007, Ward paid $2,400 to renew the comprehensive insurance coverage for one year. The premium was $2,160 on the old policy, which expired on April 1, 2007.
6. Depreciation on the equipment was computed at $5,800 for 2007.
7. Unpaid vendors' invoices for food purchases totaled $8,800 at December 31, 2007.
8. Accrued expenses at December 31, 2006 and December 31, 2007 were as follows:

After obtaining the preceding information, Ward's accountant prepared the following partially completed worksheet:

Required
1. Complete the preceding worksheet to convert the trial balance of Ward Specialty Foods to the accrual basis for the year ended December 31, 2007.
2. Prepare the statement of changes in Mary Ward, Capital, for the year ended December 31,2007.

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Trial Balance December 31, 2007 Debit 18,500 Credit Cash Accounts receivable, 12/31/06 Inventory, 12/31/06 Equipment Accumulated depreciation, 12/31/06 Accounts payable, 12/31/06 Payroll taxes withheld Mary Ward, withdrawals Mary Ward, capital, 12/31/06 Sales Purchases Salaries Payroll taxes Rent Miscellaneous expense Insurance Utilities 4,500 20,000 35,000 $ 9,000 4,800 850 24,000 33,650 187,000 82,700 29,500 2,900 8,400 3,900 2,400 3,500_ $235,300 $235,300 12/31/06 12/31/07 Payroll taxes Salaries Utilities $250 375 275 $400 510 450 Cash Basis Adjustments Accrual Basis Accounts Debit Credit Debit Credit Debit Credit $18,500 Accounts receivable 4,500 ventory 20,000 35,000 Accumulated depreciation Prepaid rent $9,000 paid insurance Accounts 4800 850 33,650 187,000 Payroll taxes withheld Ward, capital ales Purchases Income 82,700 29,500 2,900 8,400 3,900 2400 3,500 taxes Miscellaneous expenses Bad debts Totals