2.

The December 31, 2021, unadjusted trial balance for the Wolkstein Drug Company is presented below. December 31 is the companys year-end reporting date.

Account Title	Debits		Credits
Cash	50,810
Accounts receivable	29,750
Prepaid rent	4,600
Inventory	46,250
Equipment	102,000
Accumulated depreciation			30,600
Accounts payable			33,000
Salaries payable			0
Common stock			100,000
Retained earnings			29,500
Sales revenue			463,000
Cost of goods sold	277,800
Salaries expense	92,600
Rent expense	27,600
Depreciation expense	0
Utilities expense	18,520
Advertising expense	6,170
Totals	656,100		656,100

The following year-end adjusting entries are required:

1. Depreciation expense for the year on the equipment is $10,200.
2. Salaries at year-end should be accrued in the amount of $5,960.

Exercise 2-20 (Algo) Part 2

2. Prepare an income statement for 2021 and a balance sheet as of December 31, 2021.