Question

Account Name	Amount
Income tax expense	$12,380
Cash (beginning of year)	39,910
Purchase of intangibles	1,560
Website design	1,500
Supplies expense	1,375
Supplies	3,150
Payment of dividends	7,000
Service revenue	79,480
Cash received from debt	25,000
Dividends	7,000
Payments to suppliers	56,925
Retained earnings (beginning of year)	28,365
Bank loan payable, due in 2025	25,000
Website expense	1,000
Advertising expense	1,750
Owner's capital	17,500
Prepaid insurance	1,800
Contributions by owners	8,500
Business licence	60
Insurance expense	3,600
Interest expense	1,800
Accounts receivable	52,375
Prepaid expenses	2,700
Income tax payable	2,775
Deferred revenue	2,450
Collections from customers	58,450
Accounts payable	33,845
Cash (end of year)	66,375
Salaries expense	32,550

create statement of retained earnings & balance sheet

Answer 1

a.)	Statement of Retained earnings
		Amount in $
	Retained earnings (beginning of year)	28,365
	Add: Net Income during the year	25,025
	Less: Dividends	7,000
	Retained earnings (end of year)	46,390
	Workings:-Net Income
		Amount in $
	Service revenue	79,480
	Less: Expenses
	Supplies expense	1,375
	Website expense	1,000
	Advertising expense	1,750
	Insurance expense	3,600
	Interest expense	1,800
	Salaries expense	32,550
	Income tax expense	12,380
	Total Expenses	54,455
	Net Income	25,025
b.)	Balance Sheet
	Assets	Amount in $
	Website design	1,500
	Business licence	60
	Cash	66,375
	Accounts receivable	52,375
	Prepaid expenses	2,700
	Prepaid insurance	1,800
	Supplies	3,150
	Total Assets	127,960
	Liabilities & Owner's Equity
	Bank loan payable, due in 2025	25,000
	Accounts payable	33,845
	Deferred revenue	2,450
	Income tax payable	2,775
	Retained earnings	46,390
	Owner's capital	17,500
	Total Liabilities & Owner's Equity	127,960
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