Answer and Explanation:
The Preparation of income statement, retained earnings statement, and balance sheet is prepared below:-
<u> Elliptical Consulting</u>
<u> Income statement</u>
<u> For the Year Ended June 30, 2016</u>
<u>Particulars Amount</u>
Revenue
Fees earned $60,000
Less:
Expenses
Salary expense $32,375
Supplies expense $2,100
Depreciation expense $1,500
Miscellaneous expense $2,000
Total expense $37,975
Net income $22,025
<u> Elliptical Consulting</u>
<u> Retained earning</u>
<u> For the Year Ended June 30, 2016</u>
<u>Particulars Amount</u>
Opening balance $52,200
Add:Net income for the year $22,025
Total $74,225
Less: Dividends $2,000
Closing balance of retained
earnings $72,225
<u> Elliptical Consulting</u>
<u> Balance Sheet</u>
<u> For the Year Ended June 30, 2016</u>
<u>Particulars Amount</u>
Assets
Cash $27,000
Accounts receivable $53,500
Supplies $900
Total current assets $81,400
Property plant and equipment
Office Equipment $30,500
Less:Accumulated
Depreciation $6,000 $24,500
Total Assets $105,900
Liabilities & Stockholder's Equity
Accounts payable $3,300
Salaries payable $375
Total liabilities $3,675
Stockholder's Equity
Common Stock $30,000
Retained earnings $72,225
total stockholders Equity $102,225
Total liabilities and Stockholder's
Equity $105,900
