Question

Using the adjusted trial balance below, prepare an income statement, statement of retained earnings, and a balance sheet as of December 31. Download the Excel spreadsheet located in the instructions and use it as a template for your financial statements. Once you have completed the statements, save the file and upload the completed spreadsheet for grading.

Parties Plus, Inc.

Adjusted Trial Balance

December 31

	Debit	Credit
Cash	$1,600
Accounts receivable	4,000
Office equipment	16,800
Accumulated depreciation		$1,600
Income tax payable		2,800
Capital stock		5,000
Retained earnings		7,420
Dividends	500
Service fees earned		21,920
Wages expense	10,500
Supplies expense	1,120
Depreciation expense	960
Income tax expense	2,800
	$38,740	$38,740

Answer 1

1.)	Income Statement
	For the year ended December 31		Amount $
	Revenue
	Service fees earned		21,920
	Expenses
	Wages expense	10,500
	Supplies Expense	1,120
	Depreciation Expense	960
	Income Tax Expense	2,800
	Total Expense		15,380
	Net Income		6,540
2.)	Statement of retained earnings
		Amount $
	Beginning Balance	7,420
	Add: Net Income	6,540
		13,960
	Less: Dividend	500
	Ending Balance	13,460
3.)	Balance Sheet
	As at December 31		Amount $
	Assets
	Current Assets
	Cash		1,600
	Accounts Receivable		4,000
	Property , Plant & Equipment
	Office Equipment	16,800
	Less: Accumulated Depreciation	1,600	15,200
	Shortage of Debit balance in Trial Balance		460
	(38,740 - 38,280 )*
	Total Assets		21,260	-
	Liabilities & Stockholder's Equity
	Current Liabilities
	Income tax payable		2,800
	Stockholder's Equity
	Common Stock		5,000
	Retained earnings		13,460
	Total Liabilities & Stockholder's Equity		21,260