Question

Preparation of financial statements

Using the Adjusted Trial Balance shown below, prepare the company’s:

(a)   Income Statement

(b)   Statement of Retained Earnings

(c)    Balance Sheet

by completing the tables provided on the following pages.

Repair Shop Adjusted Trial Balance Dec. 31, 2016
	Debit	Credit
Cash	$ 30,000
Supplies	2,000
Accounts Receivable	70,000
Equipment	30,000
Accumulated Depreciation on Equipment		$ 10,000
Accounts Payable		20,000
Notes Payable		5,000
Income Taxes Payable		20,000
Capital Stock		30,000
Retained Earnings (as of Jan 1, 2016)		10,000
Dividends	15,000
Repair Service Sales Revenue		130,000
Wages Expense	40,000
Rent Expense	10,000
Supplies Expense	4,000
Utilities Expense	3,000
Depreciation Expense	1,000
Income Tax Expense	20,000	______
	225,000	225,000

a.)

Repair Shop Income Statement For the year ending Dec. 31, 2016

b.)

Repair Shop Statement of Retained For the year ending Dec. 31, 2016

c.)

Repair Shop Balance Sheet As of Dec. 31, 2016

Answer 1

A B INCOME STATEMENT 2 PARTICULARS AMOUNT 3 Repair Service Revenue 1,30,000 4 Less: Expenses 5 Wages Expense 40000 6 Rent expense 10000 7 Supplies Expense 4000 8 Utilities Expense 9 Depreciation expense 1000 58,000 3000 11 Net income before tax 12 Less: Income tax 13 Net Income after tax 72,000 20,000 52,000 16 Statement of retained earnings' 17 Opening balance of Retainedearnings 18 Add: Net income after tax 19 20 Less: Dividend paid Closing balance of Retained 21 earnings 22 10000 52,000 62.000 15,000 47,000

Balance Sheet 30,000 2,000 70,000 27 Assets: 28 Cash 29 Supplies' 30 Accounts receivables' 31 Equipment 32 Less: Accumulated Depreciation 33 34 Liabilities: 35 Accounts payable 36 Note payable 30,000 10,0001 Total Assets 20,000 1,22,000 20,000 5,000 37 Income tax payable 38 Capital Stock 39 Retained earnings 20,000 30,000 47,000 1.22,000 Total Liabilites

INCOME STATEMENT AMOUNT 130000 2 PARTICULARS 3 Repair Service Revenue 4 Less: Expenses 5 Wages Expense 6 Rent expense 7 Supplies Expense 8 Utilities Expense 9 Depreciation expense 40000 10000 4000 3000 1000 =SUM(B5:39) 10 11 Net income before tax 12 Less: Income tax 13 Net Income after tax =C3-C9 20000 =C11-C12 25 Statement of retained earnings' 17 Opening balance of Retainedearnings 18 Add: Net income after tax 10000 =C13 =C18+C17 15000 19 20 Less: Dividend paid 21 Closing balance of Retained earnings =C19-C20

Balance Sheet Balance 27 Assets: 28 Cash 29 Supplies' 30 Accounts receivables' Equipment 32 Less: Accumulated Depreciation 30000 2000 70000 30000 10000 Total Assets =B31-B32 =SUM(C28:C32) 34 Liabilities: Accounts payable 36 Note payable 20000 5000 37 Income tax payable 38 Capital Stock 39 Retained earnings 20000 30000 47000 Total Liabilites =SUM(C35 C39) 41 42