Question

Part 4: Based on the Adjusted Trial Balance provided in Question 2 of the Financial Statement Homework quiz on D2L, prepare in proper format the Income Statement, the Retained Earnings Statement, and a Classified Balance Sheet (in this order). Include all appropriate headings, dates, titles, subtotals and totals. (You may not use all the lines provided in the statement formats below). The Adjusted Trial Balance can be downloaded from the D2L quiz by right clicking on the image and saving it to your computer. DO NOT USE THE ADJUSTED TRIAL BALANCE CREATED IN PART 3. Insert Adjusted Trial Balance Image HERE: Laurel Company Adjusted Trial Balance December 31, 2018 80,000 38,000 4,000 25,000 96,400 25,000 94,000 Cash Accounts Receivable Supplies Prepaid Insurance Inventory Vehicle Equipment Accumulated Depreciation Accounts Payable Unearned Revenue Wages Payable Long-Term Notes Payable Common Stock Retained Earnings (1/1/2018) Dividends Service Revenue Repair Expense Delivery Expense Depreciation Expense Rent Expense Insurance Expense Wages Expense Supplies Expense Interest Expense Income Tax Expense Total 60,000 29,000 23,000 40,500 16,000 23,000 65,700 4,000 606,900 3,800 50,000 31,000 64,000 38,000 198,000 57,900 10,000 45,000 864,100 864,100 Page 5 of 9

Answer 1

1. Income Statement -

Laurel Company Income Statement For the Year Ended December 31, 2018 Service Revenue $ 606,900 Operating Expenses: Repair Expense Delivery Expense Depreciation Expense Rent Expense Insurance Expense Wages Expense Supplies Expense Total Expenses Operating Income Non Operating Expenses: Interest Expense Profit before Tax Income Tax Expense Net Income $ 3,800 $ 50,000 $ 31,000 $ 64,000 $ 38,000 $ 198,000 $ 57,900 $442,700 $164,200 $ 10,000 $ 154,200 $ 45,000 $ 109,200

2. Statement of Retained Earnings -

Laurel Company Statement of Retained Earnings For the Year Ended December 31, 2018 Retained Earnings, Opening $ 65,700 Add: Net Income $ 109,200 Less: Dividends $ (4,000) $105,200 Retained Earnings, Closing $ 170,900

3. Balance Sheet -

Laurel Company Balance Sheet December 31, 2018 Asset Current Assets: Cash Accounts Receivable Supplies Prepaid Insurance Inventory Total Current Assets $ 80,000 $ 38,000 $ 4,000 $ 25,000 $ 96,400 $ 243,400 Vehicle Equipment (-) Accumulated Depreciation $ 25,000 $ 94,000 $ (60,000) Total Assets $ 302,400 Liabilities and Stockholder's Equity Current Liabilities: Accounts Payable Unearned Revenue Wages Payable Total Current Liabilities $ 29,000 $ 23,000 $ 40,500 $ 92,500 Non Current Liabilities: Long Term Notes Payable $ 16,000 Total Liabilities $ 108,500 Stockholder's Equity: Common Stock Retained Earnings Total Stockholder's Equity $ 23,000 $ 170,900 $ 193,900 Total Liabilities and Stockholder's Equity $ 302,400