1. Create Financial Statements from Adjusted Trial Balance

THAO COMPANY

Worksheet For the Year Ended December 31, 2020

Adjusted Account Trial Balance

No. Account Titles

101 Cash 5,300 (Dr.)

112 Accounts Receivable 10,800 (Dr.)

126 Supplies 1,500 (Dr.)

130 Prepaid Insurance 2,000 (Dr.)

157 Equipment 27,000 (Dr.)

158 Accumulated DepreciationEquipment 5,600 (Cr.)

200 Notes Payable 15,000 (Cr.)

201 Accounts Payable 6,100 (Cr.)

212 Salaries and Wages Payable 2,400 (Cr.)

230 Interest Payable 600 (Cr.)

301 Owners Capital 13,000 (Cr.)

306 Owners Drawings 7,000 (Dr.)

400 Service Revenue 61,000 (Cr.)

610 Advertising Expense 8,400 (Dr.)

631 Supplies Expense 4,000 (Dr.)

711 Depreciation Expense 5,600 (Dr.)

722 Insurance Expense 3,500 (Dr.)

726 Salaries and Wages Expense 28,000 (Dr.)

905 Interest Expense 600 (Dr.)

Totals 103,700 (Dr.) 103,700 (Cr.)

Instructions

(a) Prepare an income statement, owners equity statement, and a classified balance sheet.

(Note: $5,000 of the notes payable become due in 2021) D. Thao did not make any additional investments in the business during the year.

(b) Prepare the closing entries.

2. List all major steps in completing an accounting cycle.