Problem 2-4 (Algo) Accounting cycle; adjusting entries through post-closing trial balance [LO2-4, 2-6, 2-7, 2-8]

[The following information applies to the questions displayed below.]

Pastina Company sells various types of pasta to grocery chains as private label brands. The company's reporting year-end is December 31. The unadjusted trial balance as of December 31, 2021, appears below.

Account Title Debits Credits

Cash 32,900

Accounts receivable 41,200

Supplies 2,100

Inventory 61,200

Notes receivable 21,200

Interest receivable 0

Prepaid rent 1,500

Prepaid insurance 7,200

Office equipment 84,800

Accumulated depreciation 31,800

Accounts payable 32,200

Salaries payable 0

Notes payable 51,200

Interest payable 0

Deferred sales revenue 2,600

Common stock 68,400

Retained earnings 31,500

Dividends 5,200

Sales revenue 152,000

Interest revenue 0

Cost of goods sold 76,000

Salaries expense 19,500

Rent expense 11,600

Depreciation expense 0

Interest expense 0

Supplies expense 1,700

Insurance expense 0

Advertising expense 3,600

Totals 369,700369,700

Information necessary to prepare the year-end adjusting entries appears below.

1. Depreciation on the office equipment for the year is $10,600.
2. Employee salaries are paid twice a month, on the 22nd for salaries earned from the 1st through the 15th, and on the 7th of the following month for salaries earned from the 16th through the end of the month. Salaries earned from December 16 through December 31, 2021, were $1,050.
3. On October 1, 2021, Pastina borrowed $51,200 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
4. On March 1, 2021, the company lent a supplier $21,200 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2022.
5. On April 1, 2021, the company paid an insurance company $7,200 for a one-year fire insurance policy. The entire $7,200 was debited to prepaid insurance.
6. $650 of supplies remained on hand at December 31, 2021.
7. A customer paid Pastina $2,600 in December for 1,050 pounds of spaghetti to be delivered in January 2022. Pastina credited deferred sales revenue.
8. On December 1, 2021, $1,500 rent was paid to the owner of the building. The payment represented rent for December 2021 and January 2022 at $750 per month. The entire amount was debited to prepaid rent.

rev: 09_14_2019_QC_CS-180268, 10_11_2019_QC_CS-184133

Problem 2-4 (Algo) Part 4

4.What is the income statement and a statement of shareholders' equity for the year ended December 31, 2021, and a classified balance sheet as of December 31, 2021. Assume that no common stock was issued during the year and that $5,200 in cash dividends were paid to shareholders during the year.

This is the adjusted trial balance.