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.
$\begin{array}{|l|l|l|}\hline & \text { Debit } & \text { Credit } \\\hline \text { Cash } & \$ 20,200 & \\\hline \text { Accounts receivable } & 70,600 & \\\hline \text { Supplies } & 2,500 & \\\hline \text { Shop equipment } & 26,600 & \\\hline \text { Accumulated depreciation: shop equipment } & & \$ 9,600 \\\hline \text { Accounts payable } & & 18,000 \\\hline \text { Notes payable } & & 3,700 \\\hline \text { Income taxes payable } & & 26,700 \\\hline \text { Capital stock } & & 22,200 \\\hline \text { Retained earnings } && 5,900 \\\hline \text { Dividends } & 16,700 \\\hline \text { Fees earned } & & 127,400 \\\hline \text { Rent expense } & 9,000 & \\\hline \text { Wages expense } & 35,600 & \\\hline \text { Supplies expense } & 2,900 & \\\hline \text { Utilities expense } & 2,100 & \\\hline \text { Depreciation expense: shop equipment } & 600 & \\\hline \text { Income taxes expense } & \underline{26,700} & \\\hline & \underline{\$ 213,500} & \$ 213,500 \\\hline\end{array}$

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