Question

This alphabetized adjusted trial balance is for GalaVu Entertainment as of its December 31, 2014, year-end:

		Debit		Credit
Accounts payable			$	43,400
Accounts receivable	$	18,100
Accumulated depreciation, automobiles				68,400
Accumulated depreciation, equipment				19,900
Advertising expense		8,400
Automobiles		134,000
Cash		10,400
Depreciation expense, automobiles		12,600
Depreciation expense, equipment		3,500
Equipment		62,000
Fees earned				227,475
Interest earned				200
Interest expense		2,900
Interest payable				50
Interest receivable		400
John Conroe, capital				22,400
John Conroe, withdrawals		18,400
Land		32,000
Long-term notes payable				109,000
Notes receivable (due in 90 days)		77,000
Office supplies		3,400
Office supplies expense		12,400
Repairs expense, automobiles		7,800
Salaries expense		75,625
Salaries payable				4,900
Unearned fees				10,400
Wages expense		27,200
Totals	$	506,125	$	506,125

Required:

Use the information in the trial balance to prepare:

a.The income statement for the year ended December 31, 2014. b. The statement of changes in equity for the year ended December 31, 2014, assuming that the owner made additional investments of $12,000 during the year. c.The balance sheet as of December 31, 2014

Answer 1

(a) The income statement for the year ended December 31, 2014.
GalaVu Entertainment
income Statement for the year ended december 31,2014
		Amount in $
Fee Earned		227475
Interest earned'		200
		227675
Less: Expenses
Advertisement expenses	8400
depreciation Expenses Automobiles	12600
depreciation Expenses Equipment	3500
Interest expense	2900
Office Supplies Expense	12400
repairs Expense , auto mobiles	7800
Salaries Expense	75625
Wages Expense	27200
		150425
Net Income		77250
(b) Statement of changes in Equity for the year ended december31
particulars	Amount in $
beginning Jone conroe capital	10400
Add: Additions during the year	12000
Add: net income	77250
less: Drawings During the year	-18400
Ending capital balance	81250
Beginning capital balance =Closing capital balance - Additional During the year =$22400-$12000 =$10400

GalaVu Entertainment
Balance sheet as of December 31,2014
Particulars	Amount in $	Amount in $
ASSETS
Current Assets
cash	10400
Accounts receivables	18100
Interest receivables	400
Note receivables	77000
Office Supplies	3400
Total Current Assets		109300
Automobiles	134000
Less: Accumulated depreciation	68400	65600
Equipment	62000
Less: Accumulated depreciation	19900	42100
Land		32000
		249000
Liabilities & Capital Balances
Current liabilities
Accounts payables	43400
Interest payable	50
Salaries payables	4900
Unearned fee	10400
Total Current Liabiltiies	58750
Long term note Payable	109000
Total Liabilities		167750
John Conroe, capital		81250
Total Liabilities & Capital		249000