Question

The following trial balance has been adjusted as of December 31, 20XX Debits Credits Cash $25,000 $- Accounts Receivable 6,000 - Supplies Inventory 4,500 - Prepaid Rent 18,000 - Equipment 90,000 - Accumulated Depreciation - 2,500 Accounts Payable - 6,000 Utilities Payable - 4,000 Unearned Revenue - 1,500 Interest Payable - 150 Notes Payable - 24,000 Common Stock - 100,000 Service Revenue - 90,000 Wages Expense 35,000 - Supplies Expense 20,000 - Rent Expense 15,000 - Miscellaneous Expense 2,000 - Electricity Expense 2,400 - Telephone Expense 1,500 - Depreciation Expense 1,000 - Interest Expense 250 - Dividend 7,500 - Total $228,150 $228,150 Required: Points (1) Prepare an Income Statement 5 (2) Prepare a Statement of Retained Earnings 5 (3) Prepare a Balance Sheet 5

Answer 1

Income Statement:
Revenues:
Service revenue			90000
Expenses:
Wages expenses		35000
Supplies expenses		20000
Rent expensses		15000
Misc expenses		2000
Electricity expense		2400
Telephone expenses		1500
Depreciation		1000
Interest expenses		250
Total expenses			77150
Net Income			12850
Retained earnings statement:
Beginning balance of RE			0
Add: Net income for the year			12850
Sub-total			12850
Less:Dividend			7500
Ending balance of RE			5350
Balance Sheet:
Assets:
Cash			25000
Accounts receivable			6000
Supplies			4500
Prepaid rent			18000
Equipment		90000
Less: Accumulated dep		2500	87500
Total assets			141000
Liabilities and Equity:
Liabilities:
Accounts payable		6000
Utiltiies payable		4000
Unearned revenue		1500
Interest payable		150
Notes payable		24000
Total Liabilitiies			35650
Common Stock		100000
Retained earnings		5350
Total Stockholder's equity			105350
Total liabilities and Equity			141000