Using Sierra Company’s adjusted trial balance from QS 4-16, prepare its December 31 closing entries.

Data from Question 4-16

Use the following adjusted trial balance of Sierra Company to prepare its (1) income statement. (2) statement of owner’s equity for the year ended December 31. The L. Sierra, Capital account balance was $10,500 on December 31 of the prior year, and there are no owner investments during the current year.

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Adjusted Trial Balance Cash Prepaid insurance Notes receivable (due in 5 years) Buildings Accumulated depreciation-Buildings Accounts payable Notes payable (due in 3 years) L. Sierra, Capital L. Sierra, Withdrawals Consulting revenue Wages expense Depreciation expense-Buildings Insurance expense Totals Debit $ 5,000 500 4,000 20,000 Credit $12,000 2,500 3,000 10,500 1,000 3,500 2,000 1,500 $37,500 $37,500 9,500