Schultz Company prepares interim financial statements at the end of each quarter. The income statement presented at the end of the first quarter of 2016 is as follows:

Shown next is the Schultz Company trial balance as of June 30, 2016:

Additional information:
1. The company uses a perpetual inventory system.
2. The company uses control accounts for selling and administrative expenses.
3. The company records and posts its adjusting entries to its accounts only at year-end.
4. Uncollectible accounts average 0.5% of net sales.
5. The $4,000 note receivable was received on March 1, 2016. The 6-month note carries an annual interest rate of 12%, the interest to be collected at the maturity date.
6. The balance in the Prepaid Insurance account represents payment made on January 1, 2016, for a 1-year comprehensive insurance policy.
7. The Property and Equipment account consists of land, $5,000; buildings, $55,000; and equipment, $20,000. The buildings are being depreciated over a 25-year life; the equipment over an 8-year life. Straight- line depreciation is used; residual value is disregarded. No acquisitions have been made in 2016. The depreciation on the buildings is treated as an administrative expense; depreciation on the equipment as a selling expense.
8. On February 1, 2016, the company rented some floor space to another company, receiving 1 year€™s rent of $1,800 in advance.
9. The bonds pay interest semiannually on January 1 and July 1. Straight-line amortization of the discount is recorded at the end of each year.
10. The company estimates that its pretax income for the second half of 2016 will total $11,550. All items in income are subject to the same income tax rate schedule. The income tax rate schedule is 15% on the first $20,000 of taxable income and 30% on the excess. There is no difference between the company€™s pretax financial income and taxable income, and no tax credits are available. The company rounds its estimated effective income tax rate to the nearest tenth of a percent. Income taxes will be paid during the first quarter of 2017.
11. On June 29, 2016, the company had declared and recorded (directly in Retained Earnings) a semiannual dividend of $0.40 per share, payable on August 3, 2016.
12. The 8,000 shares of common stock have been outstanding the entire 6 months of 2016.
Required:
1. Prepare a 10-column worksheet to develop the Schultz financial statements for the first 6 months of 2016. (Refer to Chapter 3 for a worksheet illustration, if necessary.)
2. Prepare the income statement for
(a) The first 6 months of 2016 and
(b) The second quarter of 2016.
3. Prepare a retained earnings statement for the first 6 months of 2016.
4. Prepare the June 30, 2016, balance sheet.

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Sales (net) Cost of goods sold Gross profit Operating expenses: $ 40,000 23,000 $17,000 Selling expenses Administrative expenses Total operating expenses $8,800 4210 13,010 $ 3,990 Prelax operating income Other items: Interest revenue Rent revenue Interest expense $ 40 300 (330 10 $ 4,000 700 3,300 0.41 Income before income taxes Income tax expense Net income Earnings per share (8,000 shares] Debit Credit 7,200 10,300 Accounis Receivable (net) Note Receivable (due 9/1/16) 4,000 24,400 Prepaid Insurance Property and Equipment Accumulated Depreciation Accounts Payable Dividends Payable Uneamed Rent Bonds Payable, 10% (due l / I/2021 ) Discount on Bonds Payable Common Stock $1 par Additional Paid-in Capital on Common Stock Retained Earnings Sales (net) Cost of Goods Sold Selling Expenses Administrative Expenses 80,000 $ 20,000 8,000 3,200 1,800 12,000 2 8,000 34,580 26,400 90,000 48,600 19,750 8, 170 $203,980 3203,80