Preparation of Financial Statements
Using the Adjusted Trial Balance Shown

question 10

Essay

Preparation of financial statements
Using the Adjusted Trial Balance shown below, prepare (a) an Income Statement and (b) a Statement of Retained Earnings for All Star Repairs.
$\begin{array}{|l|l|l|}\hline & \text { Debit } & \text { Credit } \\\hline \text { Cash } & \$ 20,200 & \\\hline \text { Accounts receivable } & 70,600 & \\\hline \text { Supplies } & 2,500 & \\\hline \text { Shop equipment } & 26,600 & \\\hline \text { Accumulated depreciation: shop equipment } & & \$ 9,600 \\\hline \text { Accounts payable } & & 18,000 \\\hline \text { Notes payable } & & 3,700 \\\hline \text { Income taxes payable } & & 26,700 \\\hline \text { Capital stock } & & 22,200 \\\hline \text { Retained earnings } && 5,900 \\\hline \text { Dividends } & 16,700 \\\hline \text { Fees earned } & & 127,400 \\\hline \text { Rent expense } & 9,000 & \\\hline \text { Wages expense } & 35,600 & \\\hline \text { Supplies expense } & 2,900 & \\\hline \text { Utilities expense } & 2,100 & \\\hline \text { Depreciation expense: shop equipment } & 600 & \\\hline \text { Income taxes expense } & \underline{26,700} & \\\hline & \underline{\$ 213,500} & \$ 213,500 \\\hline\end{array}$

Discern between the various formats of personality testing and their optimal applications.

Understand the concept of fair price and its determination in supply chain management.

Identify factors that may lead to the rejection of the lowest bid in procurement processes.

Differentiate between direct and indirect costs, including their categorizations.

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Definitions:

Standard of Proof

The level of certainty and the degree of evidence necessary to establish proof in a legal proceeding or trial.

Service of Process

The procedure by which a party to a lawsuit gives an appropriate notice of initial legal action to another party.

Deposition

A pretrial sworn and recorded testimony of a witness that is acquired out of court with no judge present.

Interrogatories

A set of formal written questions required to be answered under oath, used as a discovery tool in civil litigation to gather information from the opposing party.