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Page 2 SUMMARY INFORMATION I. BACKGROUND: Linda's Linen was incorporated on January 1, 2010 with 40,000 shares of $1 par value common stock authorized. All 40,000 shares have been issued. The company's accounting period ends on December 31 of each year. 3. 2 ACCOUNTING POLICIES: The company uses the following generally accepted accounting principles in presenting financial information a. INVENTORY VALUATION- First-in, first-out method on a perpctiual basis. Physical counts are conducted a the end of the year to determine the quantity and value of merchandise inventory on hand b. DEPRECLATION-Straight-line As of the close of business on December 31, 2017, the company had the following trial balance 4. Linda's Linen Post-Closing Trial Balance As of December 31, 2017 Credt Debit $ 100,350 S 99 400 Acct # Account Title 1110 Cash 120 Accounts Receivable 124000 5 250 000 1230 Equipment 90,000 5 50,000 1231 Accumulated Deprecistion-Equoment 2110 Accounts Payable 2210 Income Tax Payable 3010 Common Stock ($1 Par) 3020 Paid-In Captal n Excess of Par 3030 income Summary 3040 Retained Earnings 4010 Sales Revenue 5020 Cost of Goods Sold 6010 Salaries & Wages Expense 6060 Telephone & Utility Expense 6070 Rent Experse 6120 Depreciation Expense- Equipment S 40 0c0 260,000 123,750 6410 income Tax Expense Total$ 563,750 S 583.750