Exercise 2-12 (Algo) Financial statements and closing entries [LO2-7, 2-8]

The December 31, 2021, adjusted trial balance for the Blueboy Cheese Corporation is presented below.

Account Title	Debits		Credits
Cash	38,800
Accounts receivable	310,000
Prepaid rent	11,000
Inventory	46,000
Office equipment	560,000
Accumulated depreciation			234,000
Accounts payable			64,000
Notes payable (due in six months)			48,000
Salaries payable			7,100
Interest payable			1,600
Common stock			400,000
Retained earnings			130,000
Sales revenue			710,000
Cost of goods sold	426,000
Salaries expense	106,500
Rent expense	33,000
Depreciation expense	56,000
Interest expense	3,200
Advertising expense	4,200
Totals	1,594,700		1,594,700

Required: 1-a. Prepare an income statement for the year ended December 31, 2021. 1-b. Prepare a classified balance sheet as of December 31, 2021. 2. Prepare the necessary closing entries at December 31, 2021.