The adjusted trial balance columns of the work sheet for Diaz Company, owned by Carl Diaz, is as follows:

\section*{Instructions}

(a) Complete the work sheet by extending the balances to the financial statement columns.

(b) Prepare an income statement, retained earnings statement, and a classified balance sheet. (Note: \(\$ 10,000\) of the notes payable become due in 1997.)

(c) Prepare the closing entries. Use J14 for the journal page.

(d) Post the closing entries and rule and balance the accounts. Use the three-column form of account. Income Summary is No. 350.

(e) Prepare a post-closing trial balance.

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DIAZ COMPANY Work Sheet For the Year Ended December 31, 1996 Adjusted Trial Balance Account No. Account Titles Dr. Cr. 101 Cash 14,600 112 Accounts Receivable 15,400 126 Supplies 1,500 130 Prepaid Insurance 2,800 151 Office Equipment 34,000 152 Accumulated Depreciation-Office Equipment 8,000 200 Notes Payable 16,000 201 Accounts Payable 6,000 212 Salaries Payable 3,000 230 Interest Payable 500 311 Common Stock 20,000 320 Retained Earnings 5,000 332 Dividends 10,000 400 Fees Earned 88,000 610 Advertising Expense 14,000 631 Supplies Expense 5,700 711 Depreciation Expense 4,000 722 Insurance Expense 5,000 726 Salaries Expense 39,000 905 Interest Expense 500 146,500 146,500