Perfect Pizza had the following account balances at December 31, 2015:

Cash	$ 33,000	Vehicles	80,000
Accounts Receivable	15,000	Accumulated Depreciation, Vehicles	36,000
Inventory	10,000	Accounts Payable	7,000
Prepaid Expenses(include prepaid rent)	3,000	Wages Payable	2,000
Equipment	60,000	Common Shares	110,000
Accumulated Depreciation, Equipment	30,000	Retained Earnings	16,000

During 2016, the following transactions occurred:

1.Purchases of ingredients and supplies (inventory) were $230,000, all on account.

2.Sales of pizzas for cash were $510,000, and sales of pizzas on account were $40,000.

3.The company paid $105,000 for wages and $25,000 for utilities expenses.

4.Payments for ingredients and supplies purchased on account totalled $220,000.

5.Collections from customers for sales on account totalled $50,000.

6.Ingredients and supplies valued at $225,000 were used in making pizzas.

7.A dividend of $15,000 was declared and paid at the end of the year.

Information for adjusting entries:

8.At the end of 2016, the amount of rent paid in advance was $1,500.

9.Wages owed to employees at the end of 2016 were $2,500.

10.The equipment had an estimated useful life of eight years, with no residual value.

11.The delivery vehicles had an estimated useful life of six years with a residual value of $8,000.

Required

a.

Prepare journal entries for transactions 1 through 7. Create new accounts as necessary.

b.

Prepare adjusting journal entries for adjustments 8 to 11.

c.

Set up T accounts, enter the beginning balances from 2015, post the 2016 entries, and calculate the balance in each account.

d.

Prepare a statement of income for 2016.

e.

Prepare the closing entries