Instructions. (a) Prepare an income statement and a statement of owner's equity for the quarter, and a classified balance sheet at June 30, 2003 . (b) Journalize the closing entries from the adjusted trial balance (assuming the books are closed quarterly). (c) Post the closing entries to S. Smart, Capital account. After all closing entries are recorded and posted, which balance on which financial statement(s) should this amount agree with? Action Plan - Prepare the income statement first, listing revenues then expenses. - Determine the ending balance in owner's capital by adding net income to the owner's capital account, and subtracting drawings. - In preparing a classified balance sheet, know the contents of each section. Assets should be listed in order of liquidity. - In journalizing closing entries, remember that there are only three entries one to close revenues, one to close expenses, and one to close owner's drawings directly to the owner's capital account