Puntarelli Contracting keeps its accounting records on a cash basis during the year. At year-end, it adjusts its books to the accrual basis for preparing its financial statements. At the end of 2015, Puntarelli reported the following balance sheet items:

	Debit	Credit
Cash	$ 2,700
Accounts receivable	4,200
Inventory	5,600
Equipment	12,000
Accumulated depreciation		$ 4,800
Accounts payable		6,100
T. Puntarelli, capital		13,600
Totals	$24,500	$24,500

It is now the end of 2016. The company's checkbook shows a balance of $4,700, which includes cash receipts from customers of $51,300 and cash payments of $49,300.

An examination of the cash payments show that: (1) $30,600 was paid to suppliers, (2) $12,700 was paid for other operating costs (including $7,200 paid on January 1 for two years' annual rent), and (3) $6,000 was withdrawn by T. Puntarelli.

On December 31, 2016, (1) customers owed Puntarelli Company $5,900, (2) Puntarelli Company owed suppliers and employees $7,000 and $900, respectively, and (3) the ending inventory was $6,300. Puntarelli is depreciating the equipment using straight-line depreciation over a 10-year life (no residual value).

Required

1-Using accrual-based accounting, prepare a 2016 income statement.

Puntarelli Contracting
Income Statement
For Year Ended December 31, 2016
Sales revenue		$
Cost of goods sold
Gross profit		$
Operating expenses
Depreciation expense	$
Other operating expenses
Total expenses
Net income		$

2-

Using accrual-based accounting, prepare a December 31, 2016 balance sheet.

Puntarelli Contracting Balance Sheet December 31, 2016
Assets
Current Assets:
Cash	$
Accounts receivable
Inventory
Prepaid rent
Total current assets		$
Property, Plant, and Equipment:
Equipment	$
Less: Accumulated depreciation
Total property, plant, and equipment
Total assets
Liabilities
Current Liabilities:
Accounts payable	$
Salaries payable
Total liabilities		$
Owner's Equity
T. Puntarelli, capital
Total liabilities and owners' equity		$