Based on the Following Trial Balance for Sally's Salon, Prepare

question 16

Essay

Based on the following trial balance for Sally's Salon, prepare an income statement, statement of retained earnings, and a balance sheet. Sally Crawford, the sole stockholder, made no additional investments in the company during the year.
$\begin{array}{|lc|}\hline & \text { Sally's Salon } \quad \quad \quad \quad \quad \quad \quad\\\hline \text { Trial Balance } \\\hline \text { December 31 } \\\end{array}$
$\begin{array}{|l|r|l|}\hline \text { Cash } & \$ 6,500 \\\hline \text { Accounts receivable } & 475 \\\hline \text { Beauty supplies } & 2,500 \\\hline \text { Beauty shop equipment } & 17,000 \\\hline \text { Accounts payable } & & \$ \quad 745\\\hline \text { Common Stock } & & 21,155\\\hline \text { Dividends } & 36,000 \\\hline \text { Revenue earned } && 72,000 \\\hline \text { Beauty supplies expense } & 3,425 \\\hline \text { Rent expense } & 6,000 \\\hline \text { Wages expense } & 22,000 \\\hline \text { Totals } & \underline {\$ 93,900}& \underline { \$ 93,900} \\\hline\end{array}$

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Definitions:

Factory Overhead

Costs associated with the production process that are not directly tied to specific units of product, such as maintenance, utilities, and salaries of indirect labor.