Rhoades Co.. a small service repair company, keeps its records without the help of an accountant. After much effort, an outside accountant prepared the following unadjusted trial balance as of the end of the annual accounting period. December 31. 2004:

Data not yet recorded at December 31. 2004:

a. Depreciation expense for 2004. $3,000.

b. Insurance expired during 2004. S450.

c. Wages earned by employees not yet paid on December 3 1 . 2004. $ 1 . 1 00.

d. The supplies count on December 3 1 . 2004. reflected S600 remaining on hand to be used in 2005.

e. Income tax expense was S2.950.

Required: 1. Record the 2004 adjusting entries. 2. Prepare an income statement and a classified balance sheet for 2004 to include the effects of the preceding five transactions. 3. Record the 2004 closing entries.

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Account Titles Cash Accounts receivable Debit Credit 19,600 7,000 Supplies inventory 1.300 Prepaid insurance 900 Equipment 27.000 Accumulated depreciation, equipment 12,000 Other assets 5.100 Accounts payable 2.500 Wages payable Income taxes payable Note payable (2 years; 12% interest due each December 31) 5,000 Contributed capital (4,000 shares outstanding) 16,000 Retained earnings 10,300 Service revenue 48,000 Remaining expenses (not detailed; excludes income tax) 32.900 Income tax expense Totals 93.800 93,800