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Problem 2 Financial Statements ( 2 0 Points ) The adjusted trial balance for Nails Construction as of December 3 1 , 2 0 1

Problem 2 Financial Statements (20 Points)
The adjusted trial balance for Nails Construction as of December 31,2010 follows:
NAILS COSNTRUCTION
Adjusted Trial Balance
December 31,2010
Acc no Account Title Debit Credit
101 Cash 135,000
104 Short-term investments 32,000
126 Supplies 2,700
128 Prepaid Insurance 4,000
167 Equipment 55,000
168 Accumulated Dep. - Equipment 25,000
173 Building 122,000
174 Accumulated Dep. - Building 78,000
183 Land 85,000
201 Accounts Payable 44,500
203 Interest Payable 7,500
208 Rent Payable 2,800
210 Wages Payable 10,700
213 Property Tax Payable 9,000
233 Unearned professional fees 500
251 Long-term notes payable 107,000
301 R. Nails Capital 213,900
302 R. Nails, Withdrawals 39,000
401117,000
406 Rent earned 7,000
407 Professional fees earned Dividend earned 2,000
409 Interest earned 8,600
606 Depreciation Expense - Building 4,000
612 Depreciation Expense - Equipment 5,000
623 Wages Expense 82,000
633 Interest Expense 1,100
637 Insurance Expense 1,000
640 Rent Expense 34,500
652 Supplies Expense 3,400
682 Postage Expense 200
683 Property Tax Expense 6,500
684 Repairs Expense 18,900
688 Telephone Expense 750
690 Utilities Expense 1,450
Totals 633,500633,500
Additional information
1) December 31,2009, balance of the R. Nails, Capital account was $195,900(i.e. January 1,2010).
2) R. Nails invested $18,000 cash in the business during year 2010
Required:
1. Prepare the Income Statement and
2. The Statement of Changes in Equity for the calendar year 2010, and
3. The classified balance sheet of December

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