Question

Use the following Adjusted Trial Balance to create an Income Statement, Statement of Owner's Equity and a classified Balance Sheet. Please use proper terminology, such as Current Assets, Current Liabilities, Total Assets, Total Liabilities and "Total Liabilities and Owner's Equity". Feel free to use extra paper for your answer. Accumulated Depreciation - Bldg. 5,000 Accounts Payable 4,000 Accounts Receivable 20,000 Building 35,000 Cash 1,000 Cost of Goods Sold 27,000 Depreciation expense -bldg 3,000 Not included in Cost of Goods Sold Inventory 18,000 Note payable (due in 5 years) Salaries payable 34,000 2,000 Sales revenue 47,000 Smith, Capital 4,700 Smith, Withdrawals 2,700 Unearned revenue 8,000

Answer 1

Income Statement
Sales Revenue	$47,000
Less: Cost of goods sold	($27,000)
Gross Profit	$20,000
Less: Depreciation Expense - Buildings	($3,000)
Net Income	$17,000
Statement of Owner's Equity
Smith, Capital	$4,700
Add: Net Income	$17,000
Less: Smith, Withdrawals	($2,700)
Total Owner's Equity	$19,000
Balance Sheet
Assets
Current Assets:
Cash		$1,000
Accounts Receivable		$20,000
Inventory		$18,000
Total Current Assets		$39,000
Property, plant and equipment:
Buildings	$35,000
Less: Accumulated depreciation - buildings	($5,000)	$30,000
Total Assets		$69,000
Liabilities and Owner's Equity
Liabilities
Current Liabilities:
Accounts Payable	$4,000
Salaries Payable	$2,000
Unearned Revenue	$8,000
Total Current Liabilities		$14,000
Long-term Liabilities:
Notes Payable (due in 5 years)		$34,000
Total Liabilities		$48,000
Owner's Equity		$19,000
Total Liabilities and Owner's Equity		$67,000

Note: The balance sheet is not tallied because the given trial balance is not tallied on both debit and credit sides. For conceptual help, it has been answered.