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Problem Sparks Company Inc.

Price: $3.99


P4-2B The adjusted trial balance columns of the worksheet for Sparks Company Inc. owned
by Billy Sparks, are as follows

SPARKS COMPANY INC.
Worksheet
For the Year Ended December 31, 2008

Adjusted
Account Trial Balance
No. Account Titles Dr. Cr.
101 Cash 11,600
112 Accounts Receivable 15,400
126 Supplies 2,000
130 Prepaid Insurance 2,800
151 Office Equipment 34,000
152 Accumulated Depreciation—Office Equipment 8,000
200 Notes Payable 20,000
201 Accounts Payable 9,000
212 Salaries Payable 3,500
230 Interest Payable 800
311 Common Stock 15,000
320 Retained Earnings 10,000
332 Dividends 10,000
400 Service Revenue 85,000
610 Advertising Expense 12,000
631 Supplies Expense 5,700
711 Depreciation Expense 8,000
722 Insurance Expense 5,000
726 Salaries Expense 44,000
905 Interest Expense 800
Totals 151,300 151,300

Instructions
(a) Complete the worksheet by extending the balances to the financial statement columns.

(b) Prepare an income statement, a retained earnings statement, and a classified balance sheet.

(Note: $10,000 of the notes payable become due in 2009.) No additional common stock was
issued during the year.

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

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

(e) Prepare a post-closing trial balance.

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