42. Accrual entries are made to ensure that:

a. expense are recognized in the period in which they are incurred.

b. revenues are recorded in the period in which they are earned.

c. balance sheet and income statement accounts have correct balances at the end of an accounting period.

d. All of the above

Financial Statement Preparation Below is information for Hercules Corp for the year ending December 31, 2012:

Required: Prepare a multi-step income statement, statement of retained earnings, and classified balance sheet for the company. Use the Scantron 886-E pages to prepare your work.

Accounts Payable Dividends Insurance Expense Equipment InterestPayable Accounts Receivable Common Stock Cost of Goods Sold Rent Expense Salaries Payable Sales Revenue 4,000 aumert portion of notespayable 3500 3,000 Inventory 7.000 Retained earnings Jamuary 1 18 000 10,000 4600 81.500 Salaries Expense 17,500 300 Accumulated Depreciaton 24,000 Prepaid insurance 2,000 72.000 Interest Expense 2,400 2,500 50,000 Depreciation Expense 42,000 25.500 Cash 9700 Long-term Notes Payable 100,000 (Norcument portion) 45500