Answer:
JOSEPH COOPER CO.
1. Income Statement
December 31, 2020
Service Revenue $12,130
Salaries & Wages Expense 7,380
Rent Expense 2,218
Depreciation Expense 187
Interest Expense 125 9,910
Net income $2,220
2. Statement of Retained Earnings
December 31, 2020
Retained Earnings, January 1, 2020 $11,850
Net income 2,220
Dividends (3,540)
Retained Earnings, December 31, 2020 $10,530
3. Classified Balance Sheet
December 31, 2020
Assets
Current Assets:
Cash $20,012
Accounts Receivable 7,460
Prepaid Rent 2,820 $30,292
Long-term assets:
Equipment 18,590
Accumulated Depreciation (5,435) $13,155
Total assets $43,447
Liabilities + Equity
Current liabilities:
Accounts Payable $6,012
Interest Payable 125 $6,137
Long-term liabilities:
Notes Payable 6,240
Total liabilities $12,377
Equity:
Common Stock $20,540
Retained Earnings 10,530 $31,070
Total liabilities + Equity $43,447
Explanation:
a) Data and Calculations:
JOSEPH COOPER CO.
ADJUSTED TRIAL BALANCE DECEMBER 31, 2020
Debit Credit
Cash $20,012
Accounts Receivable 7,460
Prepaid Rent 2,820
Equipment 18,590
Accumulated Depreciation-Equipment $5,435
Notes Payable 6,240
Accounts Payable 6,012
Common Stock 20,540
Retained Earnings 11,850
Dividends 3,540
Service Revenue 12,130
Salaries & Wages Expense 7,380
Rent Expense 2,218
Depreciation Expense 187
Interest Expense 125
Interest Payable 125
Totals $62,332 $62,332
