Chapter 4, Problem 4.17ME

Reporting an Income Statement

The Sky Blue Corporation has the following adjusted trial balance at December 31.

	Debit	Credit
Cash	$ 1,230
Accounts Receivable	2,000
Prepaid Insurance	2,300
Notes Receivable (long-term)	3,000
Equipment	12,000
Accumulated Depreciation		$ 2,600
Accounts Payable		5,420
Salaries and Wages Payable		1,000
Income Taxes Payable		2,900
Unearned Revenue		600
Common Stock		2,400
Retained Earnings		1,000
Dividends	300
Sales Revenue		42,030
Rent Revenue		300
Salaries and Wages Expense	21,600
Depreciation Expense	1,300
Utilities Expense	4,220
Insurance Expense	1,400
Rent Expense	6,000
Income Tax Expense	2,900
Total	$58,250	$58,250

Prepare an income statement for the year ended December 31. How much net income did the Sky Blue Corporation generate during the year?

M4-17 Recording Closing Journal Entries

Refer to the adjusted trial balance in M4-14. Prepare closing journal entries on December 31.