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week 4 E2-10 - E 2-10 Financial statements and closing...

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E 2-10 Financial statements and closing entries LO6 LO7 The December 31, 2006, adjusted trial balance for the Blueboy Cheese Corporation is presented below.
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Account Title Debits Credits Cash 21,000 Accounts receivable 300,000 Allowance for uncollectible accounts 20,000 Prepaid rent 10,000 Inventory 50,000 Equipment 600,000 Accumulated depreciation—equipment 250,000 Accounts payable 40,000 Note payable (due in six months) 60,000 Salaries payable 8,000 Interest payable 2,000 Common stock 400,000 Retained earnings 100,000 Sales revenue 800,000 Cost of goods sold 480,000 Salaries expense 120,000 Rent expense 30,000 Depreciation expense 60,000 Interest expense 4,000 Bad debt expense 5,000 Totals 1,680,000 1,680,000 Required: 1. Prepare an income statement for the year ended December 31, 2006, and a classified balance sheet as of December 31, 2006. 2. Prepare the necessary closing entries at December 31, 2006. Amounts in parentheses do not require a minus sign. For Part 2. enter the expenses in the same order as they appear in the trial balance. 1. BLUEBOY CHEESE CORPORATION Income Statement For the Year Ended December 31, 2006 Sales revenue $ 800,000 Cost of goods sold 480,000 Gross profit 320,000 Operating expenses:
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