Question

his alphabetized adjusted trial balance is for GalaVu Entertainment as of its December 31, 2020, year-end:

		Debit				Credit
Accounts payable					$	43,800
Accounts receivable	$	18,500
Accumulated depreciation, automobiles						68,800
Accumulated depreciation, equipment						20,300
Advertising expense		8,800
Automobiles		138,000
Cash		10,800
Depreciation expense, automobiles		13,000
Depreciation expense, equipment		3,900
Equipment		64,000
Revenue						235,800
Interest income						150
Interest expense		3,300
Interest payable						75
Interest receivable		300
John Conroe, capital						22,800
John Conroe, withdrawals		18,800
Land		34,000
Long-term notes payable						113,000
Notes receivable (due in 90 days)		79,000
Office supplies		3,800
Office supplies expense		12,800
Repairs expense, automobiles		8,200
Salaries expense		76,025
Salaries payable						5,300
Unearned revenue						10,800
Wages expense		27,600
Totals	$	520,825			$	520,825

Required:
Use the information in the trial balance to prepare:

a. The income statement for the year ended December 31, 2020.

b. The statement of changes in equity for the year ended December 31, 2020, assuming that the owner made additional investments of $14,000 during the year.

c. The balance sheet as of December 31, 2020. (Be sure to list the assets and liabilities in order of their liquidity.)

Answer 1

	Income Statement
	Revenue	235,800
	Interest income	150
	Total Revenue	235,950
Less:	Expenses
	Advertising expense	8,800
	Depreciation expense, automobiles	13,000
	Depreciation expense, equipment	3,900
	Interest expense	3,300
	Office supplies expense	12,800
	Repairs expense, automobiles	8,200
	Salaries expense	76,025
	Wages expense	27,600
	Total Expenses	153,625
	Net Profit	82,325
	Statement of Equity
	John Conroe, capital	22,800
Add:	Additional Capital	14,000
	Total Capital	36,800
	Profit during the year	82,325
Less:	John Conroe, withdrawals	18,800
	Retained Earning	63,525
	Total Shareholder Fund	100,325
	Balance Sheet
	Assets	Amount	Liability	Amount
	Cash	24,800	Interest payable	75
	Accounts receivable	18,500	Salaries payable	5,300
	Interest receivable	300	Accounts payable	43,800
	Notes receivable (due in 90 days)	79,000	Unearned revenue	10,800
	Office supplies	3,800	Long-term notes payable	113,000
	Equipment	64,000	Total Liabilities	172,975
	Accumulated depreciation, equipment	-20,300
	Automobiles	138,000	John Conroe, capital	36,800
	Accumulated depreciation, automobiles	-68,800	Retained Earning	63,525
	Land	34,000	Total Shareholder fund	100,325
	Total Assets	273,300	Total liability & shareholder's fund	273,300
Note:	Cash	=10800+14000