Question

Ella Mendes prepared the following trial balance for her yoga studio, Mindful Meditation, for the year ended December 31, 2021.

Prepare financial statements.

MINDFUL MEDITATION Trial Balance December 31, 2021
		Debit		Credit
Cash		$  12,230
Accounts receivable		5,400
Supplies		1,120
Prepaid insurance		2,145
Equipment		15,200
Accounts payable				$    3,260
Notes payable				10,000
E. Mendes, capital				16,845
E. Mendes, drawings		24,000
Service revenue				85,050
Interest expense		550
Rent expense		15,500
Salaries expense		36,500
Telephone expense		2,510
		$115,155		$115,155

Instructions

Use the trial balance to do the following:

a. Prepare an income statement for Mindful Meditation for the year ended.

b. Prepare a statement of owner's equity.

c. Prepare a balance sheet.

Answer 1

Answer-a)-

MINDFUL MEDITATION
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31,2021
PARTICULARS		AMOUNT
		$
Total service revenue earned		85050
Service revenue earned	85050
Less-Expenses
Salaries expense	36500
Rent expense	15500
Telephone expense	2510
Interest expesne	550
Total expenses		55060
Net income		29990

b)-

MINDFUL MEDITATION
STATEMENT OF OWNER'S EQUITY
FOR THE YEAR ENDED DECEMBER 31,2021		Amount
		$
Opening E. Mendes, Capital		16845
Add- Net income		29990
Less- Drawings		24000
Ending E. Mendes, Capital		22835

c)-

MINDFUL MEDITATION
BALANCE SHEET
DECEMBER 31,2021
Assets		Amount
		$
Current Assets		20895
Cash	12230
Accounts receivable	5400
Supplies	1120
Prepaid insurance	2145
Equipment		15200
Total Assets		36095
Liabilities
Current liabilities		3260
Accounts payable	3260
Long-term liabilities
Notes payable		10000
Owners's capital account		22835
Total liabilties and owner's capital		36095