Colombia Textiles began operations several years ago. Its post-closing trial balance at December 31, 2020, is shown below (with accounts listed in alphabetical order):

Account ................................................................................ Account Balance1 ($000s)Accounts payable ...................................................................................................... 34Accounts receivable ................................................................................................ 106Accumulated depreciation, office furniture ........................................................... 38Accumulated depreciation, store fixtures............................................................... 61Brandy Colombia, capital2 ..................................................................................... 291Cash ............................................................................................................................ 48Franchise .................................................................................................................... 62Merchandise inventory .......................................................................................... 236Notes payable3 ....................................................................................................... 225Notes receivable4 ..................................................................................................... 14Office furniture ......................................................................................................... 52Office supplies ............................................................................................................ 5Prepaid rent .............................................................................................................. 32Store fixtures .......................................................................................................... 106Unearned revenue.................................................................................................... 12

Additional information: The following closing entries were recorded on December 31, 2020, for the year just ended.

Required

Using the information provided, prepare a single-step income statement, statement of changes in equity, and classified balance sheet.

Analysis Component: Refer to Spin Master?s December 31, 2017, balance sheet in Appendix III at the back of the textbook. Compare Spin Master?s liabilities to those of Colombia Textiles. Ignoring the balance sheet dates, which company has the stronger balance sheet? (A balance sheet is considered to be stronger the fewer liabilities it has as a percentage of total assets.)

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2020 Sales.. Dec. 31 640 Interest Income. 642 Income Summary. To close temporary credit balance accounts to the Income Summary account. Income Summary. 796 31 Depreciation Expense, Office Furniture. Depreciation Expense, Store Fixtures. Cost of Goods Sold. 13 459 21 Delivery Expense. Interest Expense. Office Salaries Expense. Office Supplies Expense. Rent Expense, Office. 63 17 21 Rent Expense, Sales. 46 Sales Discounts. Sales Returns and Allowances. 19 Sales Salaries Expense. 120 To close temporary debit balance accounts to the Income Summary account. Brandy Colombia, Capital. Income Summary. 154 154 To close the Income Summary account to Capital. Brandy Colombia, Capital. Brandy Colombia, Withdrawals 31 78 78 To close Withdrawals to Capital. 31