Question

The following is the Bravo Unlimited adjusted Trail Balance.

Bravo Unlimited
Adjusted Trial Balance
December 31, 2016
Account Title	Debit	Credit
Cash	$88,450
Accounts Receivable	231,860
Supplies	17,255
Equipment	395,285
Accumulated Depreciation		$224,260
Accounts Payable		72,555
Capital Stock		220,000
Retained Earnings		111,145
Service Revenue		893,105
Interest Income		1,500
Dividends	2,000
Rent Expense	58,500
Wages Expense	527,260
Supplies Expense	42,520
Utilities Expense	8,595
Depreciation Expense	150,840	________
Totals	$1,522,565	$1,522,565

Use this information to prepare the Balance Sheet for the fiscal year. There are additional lines in the formatted Balance Sheet form to allow for authorized alternate presentations.

Answer 1

Step 1: Calculate Net Income

The net income is calculated as below:

Bravo Unlimited
Income Statement
For the Year Ended 2016
Revenues:
Service Revenue		893,105
Interest Income		1,500
Total Revenues		894,605
Less Expenses:
Rent Expense	58,500
Wages Expense	527,260
Supplies Expense	42,520
Utilities Expense	8,595
Depreciation Expense	150,840
Total Expenses		787,715
Net Income		$106,890

_____

Step 2: Prepare Balance Sheet

The balance sheet is prepared as below:

Bravo Unlimited
Balance Sheet
December 31, 2016
Assets:
Current Assets
Cash	88,450
Accounts Receivable	231,860
Supplies	17,255
Total Current Assets		337,565
Fixed Assets
Equipment	395,285
Less Accumulated Depreciation	224,260	171,025
Total Assets		$508,590
Liabilities:
Current Liabilities
Accounts Payable		72,555
Stockholder's Equity
Capital Stock	220,000
Retained Earnings (111,145 + 106,890 - 2,000)	216,035
Total Stockholder's Equity		436,035
Total Liabilities and Stockholder's Equity		$508,590