Excalibur Corporation sells video games for personal computers. The unadjusted trial balance as of December 31, 2021, appears below. December 31 is the companys reporting year-end. The company uses the perpetual inventory system.

Account Title	Debits		Credits
Cash	60,980
Accounts receivable	23,000
Supplies	0
Prepaid rent	0
Inventory	54,000
Office equipment	67,000
Accumulated depreciation			8,710
Accounts payable			26,600
Salaries payable			3,200
Notes payable			28,800
Common stock			80,000
Retained earnings			15,300
Dividends	6,000
Sales revenue			215,000
Cost of goods sold	112,500
Interest expense	0
Salaries expense	34,750
Rent expense	12,800
Supplies expense	1,680
Utility expense	4,900
Totals	377,610		377,610

Information necessary to prepare the year-end adjusting entries appears below.

1. The office equipment was purchased in 2019 and is being depreciated using the straight-line method over an eight-year useful life with no salvage value.
2. Accrued salaries at year-end should be $4,800.
3. The company borrowed $28,800 on September 1, 2021. The principal is due to be repaid in 10 years. Interest is payable twice a year on each August 31 and February 28 at an annual rate of 10%.
4. The company debits supplies expense when supplies are purchased. Supplies on hand at year-end cost $420.
5. Prepaid rent at year-end should be $900.

1. Complete the worksheet below. 2-a. Use the information in the worksheet to prepare an income statement for 2021. 2-b. Use the information in the worksheet to prepare a statement of shareholders equity for 2021. 2-c. Use the information in the worksheet to prepare a balance sheet as of December 31, 2021. 3. Prepare the necessary closing entries assuming that adjusting entries have been correctly posted to the accounts.

Unadjusted Trial Balance Adjusting Entries Adjusted Trial Balance Income Statement Balance Sheet Account Title Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Dr. Cr. Cash $ 60,980 23,000 Accounts receivable 54,000 67,000 Supplies Prepaid rent Inventory Office equipment Accumulated depreciation Accounts payable Salaries payable Notes payable Interest payable $ 8,710 26,600 3,200 28,800 0 Common stock 80,000 Retained earnings 15,300 Dividends 6,000 Sales revenue 215,000 Cost of goods sold 112,500 Interest expense Salaries expense 34,750 Rent expense 12,800 1,680 Supplies expense Utilities Expense Depreciation expense 4,900 Net income Totals $ 377,610 Use the information in the worksheet to prepare an income statement for 2021. EXCALIBUR CORPORATION Income Statement For the Year Ended December 31, 2021 Use the information in the worksheet to prepare a statement of shareholders' equity for 2021. EXCALIBUR CORPORATION Statement of Shareholders' Equity For the Year Ended December 31, 2021 Common Stock Retained Earnings Total Shareholders' Equity Balance at January 1, 2021 Balance at December 31, 2021 EXCALIBUR CORPORATION Balance Sheet At December 31, 2021 Assets Liabilities and Shareholders' Equity