Question

The adjusted trial balance of Ryan Financial Planners appears below.

Answer 1

Answer and Explanation:

The preparation is presented below:

1. For income statement

Particulars                             (in dollars)

Service Revenue                     4,300

Less: Supplies Expense           410  

Gross Income                           3,890

Less: Depreciation Expense   2,420

Less: Rent Expense                2,920

Income Statement                 ($1,450) i.e net loss

It records expenses incurred and revenues earned

3. For retained earnings statement

Retained Earnings Statement              $

Beginning Retained Earnings            4,510

Less: Dividend Paid                            (1,000)

Less: Net Loss for the year                 (1,450)

Ending Retained earning                    2,060

It records the dividend paid and the net loss for the year

2. For Balance Sheet

Assets                                                    $

Non-Current Asset

Equipment (15,900 - 3,975)               11,925    

Current Asset              

Cash                            2,660

Accounts Receivable 2,140

Supplies                      1,850

Total current assets                         6,650

Total Asset                                       18,575 (11,925 + 6,650)

Common Stock                                   10,000

Add: Retained Earnings                      2,060

Liabilities

Current Liabilities                  

Unearned Service Revenue  3,205

Accounts Payable                   3,310

Total current liabilities            6,515

Total Equity and Liability                     18,575   ($10,000 + $2,060 + $6,515)

It shows the financial position, performance of the company