The adjusted trial balance columns of the work sheet for Eagle Company, owned by Alfred Eagle, are as follows.

Instructions

(a) Complete the work sheet by extending the balances to the financial statement columns.

(b) Prepare an income statement, a retained earnings statement, and a classified balance sheet.
(Note: $10,000 of the notes payable become due in 2007.) No additional issuances of stock occured during 2006.

(c) Prepare the closing entries. Use J14 for the journal page.

(d) Post the closing entries. Use the three-column form of account. Income Summary is No. 350.

(e) Prepare a post-closing trial balance.

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EAGLE COMPANY Work Sheet For the Year Ended December 31, 2006 Account No. Adjusted Trial Balance Account Titles Dr. Cr. 101 Cash 13.600 112 Accounts Receivable 15.400 126 Supplies 2.000 130 Prepaid Insurance 2.800 151 Office Equipment 34.000 152 Accumulated Depreciation-Office Equipment 8.000 200 Notes Payable 20,000 201 Accounts Payable 6.000 212 Salaries Payable 3.500 230 Interest Payable 800 311 320 Common Stock Retained Earnings 20,000 5,000 332 Dividends 10.000 400 Service Revenue 88.000 610 Advertising Expense 12.000 631 Supplies Expense 5.700 711 Depreciation Expense 8,000 722 Insurance Expense 5.000 726 Salaries Expense 42,000 905 Interest Expense 800 Totals 151.300 151.300