Prepare statements from a new collection of balances. Classify every line before adding totals. Contra revenue reduces sales, cost of goods sold determines gross profit, and operating expenses follow gross profit. Interest expense appears below operating income in this course's reporting layout. Owner draws belong in equity rather than on the income statement.
For the balance sheet, consider both the account type and the amount due within the next operating cycle or year. The current portion of a long-term loan is a current liability even when the rest remains long term. Keep the statement date consistent with the trial balance. After calculating net income, carry it into equity so the two statements connect.