The completed financial statement columns of the work sheet for Lathrop Company arc shown below and on the next page.

Instructions

(a) Prepare an income statement, a retained earnings statement, and a classified balance sheet.

(b) Prepare the closing entries. No additional shares of stock were issued during the year.

(c) Post the closing entries and rule and balance the accounts. Use T accounts. Income Summary is account No. 350.

(d) Prepare a post-closing trial balance^

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LATHROP COMPANY Work Sheet For the Year Ended December 31, 2006 Income Statement Balance Sheet Account No. Account Titles Dr. Cr. Dr. Cr. 101 Cash 17.400 112 Accounts Receivable 13.500 130 157 167 Prepaid Insurance Equipment Accumulated Depreciation 3.500 26,000 5,600 201 Accounts Payable 11.300 212 Salaries Payable 3,000 311 Common Stock 20,000 320 332 Retained Earnings Dividends 16,000 14.000 400 Service Revenue 64.000 622 Repair Expense 2.000 711 Depreciation Expense 2.600 722 Insurance Expense 2.200