Required

Income statement for 2010 

Balance sheet as of December 31, 2010. 

Make journal entries for every transaction,

Make adjusting entries before composing the income statement and 

Make closing entries before composing the balance sheet.

Medford Moving Corporation was founded on May 1, 2010.

May 1, 2010, Mr. Medford incorporated Medford Moving Co.. Medford Moving Co. issued 100,000 common shares. The par value per share is $1, and the company got $300,000 from issuing shares.

May 1, 2010, the company paid $40,000 cash to purchase two trucks. The trucks' useful life is 10 years. Medford uses straight-line depreciation method and assumes no residual value at the end of tenth year.

July 1, 2010, one year rent of $60,000 for the office building was paid up front. The rent is for the period of July 1, 2010 to June 30, 2011.

July 1, 2010, Medford Co. borrowed $10,000 from a local bank by signing a two-year note. The annual interest rate for that loan is 6%. The first interest payment is due on June 30, 2011.

July 30, 2010, service revenue earned: cash collected $80,000; on credit $12,000.

August 3, 2010, collected $1,000 in advance for service to be provided next year.

September 2, salary expenses incurred: paid cash, $28,000; on credit, $7,000.

Dec 15, 2010, declared a cash dividend of $2,000, which will be paid in January 2011.