Music -Is Us is a supplier of musical instruments for professional and amateur musicians. The company's accountants make adjusting entries monthly, and they make allclosing entries annually. The company is growing rapidly and prides itself on having no longer-term liabilities.

The company has provided the following trial balance dated December 31, 2015:

Music Is Us Inc, Trial Balance December 31 2015

Cash	48,000
Marketing securities	29,000
Accounts Receivable	131,000
Allowance for doubtful accounts		5,300
Merchandise inventory	253,000
Office Supplies	1,700
Prepaid insurance	6,160
Building and fixtures	1,798,000
Accumulated depreciation		798,000
Land	69,800
Accounts payable		62,000
Unearned cutomer deposits		7,700
Income taxes payable		71,000
Capital stocks		900,00
retained earnings		239,200
Unrealized holding gain on investments		5,900
Sales		1,724,820
Cost of goods sold	955,000
Bank Service Charges	160
Uncollectible accounts expene	8,400
Salary and wages expense	386,000
Office supplies expense	600
Insurance expense	5,600
Utilities expense	3,500
Depreciation expense	47,000
Income Tax Expense	71,000
	3,813,920	3,813,920

Other information pertaining to the trial balance is shown below:

1. The most recent bank statement reports a balance of $49,080. Included with the bank statement was a $2,200 check from Iggy Smarts, a professional musician, charged back to Music-Is-Us as NSF. The banks monthly service charge was $20. Three checks written by Music-Is-Us to suppliers of merchandise inventory had not yet cleared the bank for payment as of the statement date. These checks included: no. 508, $3,600; no. 511, $8,500; and no. 521, $7,500. Deposits of $16,300 reached the bank too late for inclusion in the current bank statement. The company prepares a bank reconciliation at the end of each month.

2. Music-Is-Us has a portfolio of marketable securities that originally cost $23,000. As of December 31, the market value of these securities was $31,200. All short-term investments are classified as "available for sale."

3. During December, $5,800 of accounts receivable were written off as uncollectible. A recent aging of the company's accounts receivable helped management to conclude that an allowance for doubtful accounts of $7,800 was needed at December 31, 2015.

4. The company uses a perpetual inventory system. A year-end physical count revealed that several guitars reported in the inventory records were missing. The cost of the missing units amounted to $1,100. This amount is not considered significant relative to the total cost of inventory on hand.

5. At December 31, approximately $890 in office supplies remained on hand.

6. The company pays for its insurance policies 12 months in advance. Its most recent payment was made on November 1, 2015. The cost of this policy was slightly higher than the cost of coverage for the previous 12 months.

7. Depreciation expense related to the company's building and fixtures is $4,000 for the month ending December 31, 2015.

8. Although Music-Is-Us carries an extensive inventory, it is not uncommon for experienced musicians to order custom guitars made to their exact specifications. Manufacturers do not allow any sales returns of custom-made guitars. The entire sales amount is collected at the time a custom order is placed, and is credited to an account entitled Unearned Customer Deposits. As of December 31, $3,800 of these deposits remained unfilled because the special-order guitars have not been received from the manufacturer. The cost of goods sold and the reduction in inventory associated with all custom orders is recorded when the custom merchandise is delivered to customers. At that time, the adjusting entry requires only a decrease to unearned customer deposits and an increase in sales.

9. Accrued income taxes payable for the entire year ending December 31, 2015, total $80,000. No income tax payments are due until early in 2016.

Prepare/Answer the following:

k-1 Using the adjusted trial balance above, prepare an annual income statementdated December 31, 2015.

k-2 Using the adjusted trial balance above, prepare statement of retained earnings dated December 31, 2015.

k-3 Using the adjusted trial balance above, prepare a balance sheet dated Decembere 31, 2015.