Preparing closing entries and financial statements The adjusted trial balance for Anara Co. as of December 31, 2008, follows.

P. Anara invested \($40,000\) cash in the business during year 2008 (the December 31, 2007, credit balance of the P. Anara, Capital account was \($52,800).\)
Required 

I. Prepare the income statement and the statement of owner’s equity for the calendar year 2008 and the balance sheet at December 31, 2008.
2. Prepare the necessary closing entries at December 31, 2008.

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ANARA CO. Adjusted Trial Balance December 31, 2008 251 301 302 401 Property taxes payable 233 Unearned professional fees Long-term notes payable P. Anara, Capital P. Anara, Withdrawals Professional fees earned No. Account Title 101 Cash 104 Short-term investments 126 Supplies 128 Prepaid insurance 167 Equipment 168 Accumulated depreciation-Equipment 173 Building 174 Accumulated depreciation-Building 183 Land 201 203 Accounts payable Interest payable 208 Rent payable 210 Wages payable 213 Debit $ 7400 00 11200 00 4600 00 100000 24000 00 100 000 00 Credit $ 4000 00 406 Rent earned 30 500 00 800000 1000000 3500 00 1750 00 400 00 (280 00 33 30 00 750 00 4000000 92 800 00 59 6:00:00 4500 00 407 Dividends earned 1000 00 409 Interest earned 1320 00 606 Depreciation expense-Building 2000 00 612 Depreciation expense-Equipment 1000 00 623 Wages expense 1850000 633 Interest expense 637 Insurance expense 640 Rent expense 652 Supplies expense 682 Postage expense 683 Property taxes expense 684 Repairs expense 688 Telephone expense 690 Utilities expense Totals 155,0.00 1525 00 360000 1000 00 410 00 4825 00 679 00 521 00 1920.00 $224 2 3 0.00 $2242 30 00