Question

Santo Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2020.

Santo Design Adjusted Trial Balance December 31, 2020
		Dr.		Cr.
Cash		$  11,350
Accounts Receivable		21,500
Supplies		5,000
Prepaid Insurance		2,500
Equipment		60,000
Accumulated Depreciation—Equipment				$  35,000
Accounts Payable				5,000
Interest Payable				150
Notes Payable				5,000
Unearned Service Revenue				5,600
Salaries and Wages Payable				1,300
Common Stock				10,000
Retained Earnings				3,500
Service Revenue				61,500
Salaries and Wages Expense		11,300
Insurance Expense		850
Interest Expense		150
Depreciation Expense		7,000
Supplies Expense		3,400
Rent Expense		4,000		000,000
		$127,050		$127,050

Instructions

a.    Prepare an income statement and a retained earnings statement for the year ending December 31, 2020, and an unclassified balance sheet at December 31.

Answer 1

a.

Santo Design
Statement of profit/loss
For the year ending 31 december 2020
	Amount	Amount
Service Revenue	61500	$61500
(-) Expenses:
Salaries and Wages Expense	$11,300
Insurance Expense	$850
Interest Expense	$150
Depreciation Expense	$7,000
Supplies Expense	$3,400
Rent Expense	$4,000
Total Expenses		$26700
Net profit		$34800

Santo Design
Statement of Retained earnings
For the year ending 31 december 2020
Retained earnings at the begining of the period	$3500
(+) net income/(loss)	$34800
(-) dividends	$0
Retained earnings at the end of the period	$38300

Santo Design
Balance sheet
As on 31 december 2020
Assets:
Cash	$ 11,350
Accounts Receivable	$21,500
Supplies	$5,000
Prepaid Insurance	$2,500
Equipment	$60,000
Accumulated Depreciation—Equipment	($35000)
Total Assets	$65350
Liabilities and equity:
Accounts Payable	$5,000
Interest Payable	$150
Notes Payable	$5,000
Unearned Service Revenue	$5,600
Salaries and Wages Payable	$1,300
Common Stock	$10,000
Retained Earnings	$38300
Total liabilities and equity	$65350