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

question 7

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.
$\begin{array}{c}\text { Sal's Beauty Shop}\\\text { Trial Balance}\\\text { December 31}\\\begin{array}{|l|r|r|}\hline \text { Cash } & \$ 6,500 & \\\hline \text { Accounts receivable } & 475 & \\\hline \text { Beauty supplies } & 2,500 & \\\hline \text { Beauty shop equipment } & 17,000 &\\\hline\text { Accounts payable } & & \$ 745 \\\hline \text { Common stock } & & 10,000 \\\hline \text { Retained earnings } & & 11,155 \\\hline \text { Dividends } & 36,000 & \\\hline \text { Revenue earned } & & 72,000 \\\hline \text { Beauty supplies expense } & 3,425 & \\\hline \text { Rent expense } & 6,000 & \\\hline \text { Wages expense } & \underline{22,000} & \\\hline \text { Totals } & \$ 93,900 & \$ 93,900 \\\hline\end{array}\end{array}$

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Definitions:

Market Capitalization

The total value of a company's outstanding shares of stock, calculated by multiplying the current market price of one share by the total number of shares.

Authorized Shares

The highest number of shares a company is permitted to issue according to its articles of incorporation.

Common Shares

Equity securities that represent ownership in a corporation, entitling holders to vote on corporate matters and share in the profits through dividends.

Share Capital

The amount of money raised by a company through the sale of shares to investors, representing ownership in the company.