QUESTION 5 16 POINTS 30 MINUTES

Here are, in alphabetical order, certain accounts taken from Teddy Inc.'s trial balance as at December 31, 2015. All amounts are in Canadian dollars.

Prepaid insurance $ 500 Delivery charge $ 9,000 Insurance 2,500 Suppliers 3,500 Depreciation - equipment 17,500 Cost of goods sold 200,000 Accumulated depreciation - equipment 10,000 Salary payable 3,000 Customers 10,000 Dividend 15,000 Bank loan 25,000 Sales 420,500 Office supplies used 1,750 Salaries 50,500 Cash 6,000 Stock 88,500 Bank charges 500 Teddy Inc. Capital 150,000 Advertising 5,000 Income taxes 6,500

Work to do

1. Prepare in due form, the income statement of Teddy Inc. for the year ended December 31, 2015. Please note that some accounts are balance sheet accounts and should not appear in the income statement. 2. Make the closing entries.