Please prepare closing entries.

The 2015 balance sheet of the Stark Industries is attached. During 2016, the following events occurred.

1. On January 10, sell merchandise on account to Rayms $9,800 and Fischer $8,600. Terms 1/10, n/30. Freight $100 for each sale, F.O.B. shipping point.

2. On January 12, purchase merchandise on account from Zapfel $3,000 and Liotta $2,400. Terms 2/10, n/30. Freight $120 for each sale, F.O.B. destination.

3. On January 13, receive checks, $4,000 from Longhini and $2,000 from Hall, for sales on account after discount period has lapsed.

4. On January 15, send checks to Joosten for 9,000 less 2% cash discount, and to Maida for $11,000 less 1% cash discount.

5. On January 16, issue credit of $200 to Fieber for merchandise returned.

6. On January 18, summary daily cash sales total $17,520.

7. On January 21, pay off the balances to Zapfel and Liotta for the purchases on January 12.

8. On Feburary 9, receive payment in full from Rayms and Fischer.

9. On January 1, pay rent of $6,000 for a two-year term.

10. On April 1, sell merchandise on account to Dunlap $1,600, term 2/10, n/30. Freight $100, F.O.B. shipping point.

11. Pay $500 cash for office supplies on May 1.

12. Cash dividends totaling $900 are declared on June 13 and paid to stockholders on June 23.

13. Issue a note of $120,000 to bank (one year, annual interest rate 2%) for cash on July 1.

14. On July 5, purchase merchandise from Maida $33,000, terms 2/10, n/30.

15. On July 7, issue common stock 1000 shares, $10 par, in exchange of a land with a fair market value of $15,000.

16. On July 8, return $200 of merchandise to Maida and receive credit.

17. On August 1, sell merchandise to Lachey on account $80,000, term 1/10, n/30. Freight $1,500, F.O.B. shipping point.

18. On August 4, pay off the balance to Maida.

19. On August 10, receive half of the payment from Lachey.

20. On August 14, write off $1,300 bad debt for one account, Tooket.

21. On August 21, pay utilities expense, $10,092.

22. On August 31, Lachey pays off its balance.

23. On September 1, pay cash $7,500 to Farmington for merchandise purchased last year.

24. On October 1, pay off notes payable $110,000 and associated accrued interest $6,000, of which $1,500 was shown on the balance sheet.

25. Over the year, sales and office employees earned $45,500 in salaries and wages, of which $1,500 was still payable at the end of year.

26. An unpaid utilities bill (December, $1,250) is due on January 10 next year.

Additional Information at the end of the year:

1. Depreciation expense for the year was $13,250. 2. The company estimated that it has to pay federal income tax, $3,250.

3. After physically counting, the company decided that the ending inventories worth $40,146.

4. Based on its historical data, the company estimated that the bad debts were about 1% of net credit 2 sales.

5. Unearned revenue is decreased by $12,000.

6. The company expenses all of the supplies purchased during the year.

7. No insurance policy is effective during the year.

8. The company used the gross method to record its purchases and sales on credit.

9. The company adopts the periodic inventory system.

Stark Industries BALANCE SHEET DECEMBER 31, 2015

Current Assets Cash 42,200

Notes Receivable 16,000

Accounts Receivable 41,800 Less: Allowance for Doubtful Accounts (3,000)

Inventories 38,800

Prepaid Insurance 540

Prepaid Rent 600

Total Current Assets 136,940

Non-Current Assets Long-term Investments

Investments in held-for-maturity securities 52,000

Land held for future development 45,500

Property, Plant, and Equipment Land 85,000

Buildings 675,000 Less: Accumulated Depreciation (187,500)

Intangible Assets Capitalized Development Costs 8,000

Goodwill 76,700

Other Identifiable Intangible Assets 48,000

Total Non-Current Assets 802,700

Total Assets 939,640

Current Liabilities

Notes Payable 110,000

Accounts Payable 32,000

Unearned Revenues 13,500

Income Taxes Payable 8,440

Property Taxes Payable 6,600

Interest Payable 1,500

Total Current Liabilities 172,040

Paid-in-capital - Preferred Stock 10,000

Retained Earnings 152,750

Accumulated Other Comprehensive Income 6,000

Less: Treasury Stock (12,750)

otal Stockholders' Equity 383,500

Total Liabilities and Stockholders' Equity 939,640

Use the following check figures for Project One.

Adjusted Trial Balance: Total $1,276,554

Income Statement: Earning after income tax: $8,928

Retained Earnings Statement: Retained Earnings: $160,778

Balance Sheet: Inventory: $40,146

Total assets: $938,868

Statement of Cash Flows

Net cash flows from this year: ($1,274)

2016 Balance Sheet below:

Cash (ending): $40,926

2016 Balance Sheet

Current Assets

Cash 40926

Notes Receivable 16000

Accounts Receivable 37,100 35100

Less: Allowance for Doubtful

Accounts (2,000)

Inventories 40146

Prepaid Insurance 540 0

Prepaid Rent 600 3000

Total Current Assets 135172

Non-current Assets

Long-Term Investments 0

Investments In-held for

Maturity securities 52000

Land held for future dev. 45500

Property, plant, equip. 0

Land 95000

Buildings 675000

Less: Accum. Deprec. -200750 474250

Int Assets Capitalized

Development Costs 8000

Goodwill 76700

Other Identifiable

Intangible Assets 803696

Total Assets 938868

Current Liabilities

Notes Payable 120000

Accounts Payable 4458

Unearned Revenues 1500

Income Taxes Payable 11690

Prop. Taxes Payable 6600

Interest Payable 0

Salaries & Wages Payable 1500

Total Current Liabilities 164240