A partial work sheet for The Town Shop is presented here. The merchandise inventory at the beginning of the year was $53,200. C. A. Flagel, the owner, withdrew $26,500 during the year.

Instructions 1. Prepare an income statement. 2. Journalize the closing entries.

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The Town Shop Work Sheet For Year Ended December 31, 19- ACCOUNT NAME 1 Sales 2 Sales Returns and Allowances INCOME STATEMENT DEBIT 448000 CREDIT 328 000 00 3 Sales Discount 3707 32 4 Interest Income 1840 00 5. Purchases 199 490 00 6 Purchases Returns and Allowances 2980 00 7 Freight In 8 Wages Expense 9 Rent Expense 10 Commissions Expense 11 Interest Expense 12 Income Summary 13 Supplies Expense 14 Insurance Expense 15 Depreciation Expense, Equipment 16 Depreciation Expense, Building 17 18 Net Income 19 12 750 00 43 200 00 960000 10 3 20 00 964 22 53 200 00 83246 1040 00 360000 480000 443 60 00 347 9 8 4 00 377 1 80 00 29 196 00 377 1 8000 377 1 80 00 20