Using the Information Given Below, Prepare an Income Statement and Owner's

question 235

Essay

Using the information given below, prepare an income statement and owner's equity statement for Rapid Car Services from the adjusted trial balance. Owner Stella Grafton did not make any additional investments in the company during the year.
Rapid Car Services Adjusted Trial Balance
For the year ended December 31
$\begin{array}{lr}\text { Cash } & \$ 33,000 \\\text { Accounts receivable } & 14,200 \\\text { Office supplies } & 1,700 \\\text { Vehides } & 100,000\\\text { Accumulated depreciation - Vehicles } && 45,000 \\\text { Accounts payable } && 11,500 \\\text { Stella Grafton, Capital } && 71,900\\\text { Stella Grafton, Withdrawals } & 40,000 \\\text { Fees earned } &&155,000 \\\text { Rent expense } & 13,000\\\text { Office supplies expense } & 2,000 \\\text { Utilities expense } & 2,500 \\\text { Depreciation Expense — Vehicles } & 15,000 \\\text { Salary expense } & 50,000 \\\text { Fuel expense } & \underline{1 2 , 0 0 0} \\\text { Totals } & \underline{\$ 283,400}&\$283,400\end{array}$

---

Definitions:

Extension of Slavery

The historical process of expanding the institution of slavery into new territories in the United States before the Civil War.

President-elect Lincoln

Refers to Abraham Lincoln after winning the United States presidential election, before being officially inaugurated as President.

Compromise

Compromise involves making mutual concessions or reaching an agreement where conflicting parties find a middle ground.