I am studying for an exam and our book doesn't have any answers to look at... the problem is

Smith's Jewelry has a fiscal year extending from January 1 through December 31. Its account balances after adjustments are presented below. The beginning merchandise inventory amounts to 35,870. $2,000 is due in mortgage within the next 12 months.

Notes receivable $7,000
Interest Income 5,362
Building 45,400
Accounts payable 25,245
Prepaid Insurance 1,090
Insurance Expense 2,505
Accumulated depreciation,
Building 15,133
Notes Payable 10,250
Sales 267,111
Sales Salary expense 60,377
Rent income 2,400
Store equipment 21,500
Mortgage payable(current portion is 2,000) 31,000
Land 10,000
Sales commission expense 6400
Sales discounts 2,671
Merchandise inventory
dec. 31, 20-- 41,988
Purchases 133,556
Advertising expense 5,342
Sales returns and allowances 3,149
Purchases returns and allowances 2,642
Freight in 7,040
Office salary expense 11,119
Accounts receivable 46,627
Store supplies 1,094
Interest expense 2,100
Cash 3,305
Depreciation expense,
Building 1,297
Purchases discounts 1,335
Accumulated depreciation,
Store equip. 10,750
Salaries payable 3,420
C.P. Bennett, Drawing 60,000
Office equipment 8,875
Taxes expense 4,006
Accumulated depreciation
Office equipment 4,438
Miscellaneous general exp. 1,750
Store supplies expense 1,918
C.P. Bennett, Capital
Jan. 1, 20-- 110,980
Depreciation expense,
Office equipment 1,775
Depreciation expense,
Store equipment 4,300




What subdivisions am I supposed to use? I am also supposed to subdivide operating expenses into selling expenses and general expenses.

You must have a go yourself.
We are not allowed to do homework for you.

Rolcam.

I would start by organizing everything by account classification, of which there are five: assets, liabilies, equity, revenues & expenses. This does not look like beginning-level stuff, so I'm going to assume that you should already know what each of those classifications are and what they mean. If not, then ask, and learn them because they aren't going away.

Sorry, but I always tend to refuse to believe that a textbook does not have an example of financial statements somewhere. That's just not right. (It might not be in the same chapter.) But if you insist... there's some examples of merchandising income statements here, near the bottom of the page:
Principles of Accounting Chapter 5 (http://www.principlesofaccounting.com/chapter%205.htm)
And a balance sheet here, again near the bottom of the page:
Principles of Accounting Chapter 4 (http://www.principlesofaccounting.com/chapter%204.htm#PREPARING%20FINANCIAL%20STATEMENTS )

These are examples and do not include the same accounts that your problem does.

Give it a try first.