Based on the Following Trial Balance for Sal's Beauty Shop

question 217

Essay

Based on the following trial balance for Sal's Beauty Shop, prepare an income statement, statement of retained earnings and a balance sheet. Sal made no additional investments in the company during the year.
SAI'S BEAUTY SHOP
Trial Balarice
December 31
$\begin{array}{|l|r|r|}\hline \text { Cash } & \$ 6,500 & \\\hline \text { Accounts receivable } & 475 & \\\hline \text { Beauty supplies } & 2,500 & \\\hline \text { Beauty shop equipment } & 17,000 & \\\hline \text { Accounts payable } & & \$ 745 \\\hline \text { Common stock } & & 10,000 \\\hline \text { Retained earnings } & & 11,155 \\\hline \text { Dividends } & 36,000 & \\\hline \text { Revenue earned } & & 72,000 \\\hline \text { Beauty supplies expense } & 3,425 & \\\hline \text { Rent expense } & 6,000 & \\\hline \text { Wages expense } & 22,000 & \\\hline \text { Totals } & \$ 93,900 & \$ 93,900 \\\hline\end{array}$

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Definitions:

Law of Effect

A principle in psychology proposed by Edward Thorndike that suggests behaviors followed by satisfying outcomes are likely to be repeated, while those followed by unpleasant outcomes are less likely to recur.

Environmental Response

The reaction or adaptation of an entity (individual, community, or organization) to changes in its environmental conditions.

Monitoring Behaviours

The process of observing and assessing individuals' actions or performance to ensure conformity with standards or expectations.

Extinction Strategies

Methods used to phase out or discontinue products, services, or practices that are no longer beneficial or relevant.