Question

P3-62A (similar to) Assignments The adjusted trial balance for the year of Dreamer Corporation at October 31, 2018, follows. Click the icon to view the adjusted trial balance) Do Homework Read the requirements Take a Quiz/Test Requirement 1. Prepare Dreamer Corporation's 2018 single-step income statement statement of retained camings, and balance shoot Begin by preparing Dreamer's 2018 income statement Dreamer Corporation Income Statement Year Ended October 31, 2018 3 ber in the input fields and then chick Check Check Answer > 12

Answer 1

Required statements are prepared as below:

As on Octo 5 А в C D Dreamer Corporation Balance Sheet As on October 31, 2018 Particulars Details (S) Amount (S) Assets 6 Current Assets: 7 Cash 16000 8 Accounts receivable 18900 9 Supplies 2500 10 Prepaid rent 1400 11 Total current assets . 38800 12 Property, plant and equipment 13 Equipment 36000 14 Less: Accumulated Depreciation -4100 31900 15 Total Assets 70700 Liabilities and Shareholders' Equity 17 Liabilities: 18 Accounts payable 9300 19 Notes payable 18800 20 Interest payable 1050 21 Income tax payable 2300 22 Unearned service revenue 23 Total liabilities 32050 24 Shareholders' Equity: 25 Common stock 10000 26 Retained earnings 28,650 27 Total Shareholders' Equity 38,650 28 Total liabilities and Shareholders' Equity 70,700 29 30 Debt ratio 0.45 Total debt/Total assets 31 Debt ratio is lower than 0.50, so Dreamer need not to worry about it. Ε F Dreamer Corporation Income Statement For the year ended Oct. 31, 2018 Particulars Details (3) Amount (S) Revenue: Service revenue 99,450 Less: Expenses Depreciation expense-equipment 1,000 Salary expense 40,600 Rent expense 11200 Interest expense 3,200 Insurance expense 3,300 Supplies expense 2,200 61,500 Income before tax 37,950 Income tax 7,200 Net Income 30,750 16 Dreamer Corporation Retained Earning Statement For the year ended Oct. 31, 2018 Particulars Amount (S) Amount (S) Retained Earnings 2,900 Add: Net Income 30,750 Less: Dividends (5,000) Retained Earnings, after adjustments 28,650 600

Formulas used in the above table are as follows: