Problem #3 The adjusted trial balance columns of the worksheet for Company, owned by Meteor and Blue, are as follows.

Meteor and Blues COMPANY

Worksheet For the Year Ended December 31, 2020

Trial Balance

Dr. Cr.

101 Cash 5,300

112 Accounts Receivable 10,800

126 Supplies 1,500

130 Prepaid Insurance 2,000

157 Equipment 27,000

158 Accumulated Depreciation 5,600

200 Notes Payable 15,000

201 Accounts Payable 6,100

212 Salaries and Wages Payable 2,400

230 Interest Payable 600

301 Owners Capital 13,000

306 Owners Drawing 7,000

400 Service Revenue 61,000

610 Advertising Expense 8,400

631 Supplies Expense 4,000

711 Depreciation Expense 5,600

722 Insurance Expense 3,500

726 Salaries and Wages Expense 28,000

905 Interest Expense 600

Totals 103,700 (Dr,) 103,700 (Cr,)

Instructions (a) Complete the worksheet by extending the balances to the financial statement columns.

(b) Prepare an income statement, owners equity statement, and a balance sheet. (Note: $5,000 of the notes payable become due in 2021.) Meteor and Blue did not make any additional investments in the business during the year. (c) Prepare the closing entries.