The adjusted trial balance of Lighthouse Realty, Inc., at December 31,2010, follows:

Requirements 1. Prepare Lighthouse Realty’s 2010 income statement, statement of retained earnings, and year-end balance sheet. List expenses in decreasing order on the income statement.
2.

a. Which financial statement reports Lighthouse Realty’s results of opera¬
tions? Were operations successful during 2010? Cite specifics from the financial statements to support your evaluation.

b. Which statement reports the company’s financial position?

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Lighthouse Realty, Inc. Adjusted Trial Balance December 31, 2010 ACCOUNT Cash Accounts Receivable DEBIT $ 6,300 CREDIT 11,600 Prepaid Rent 1,200 Supplies 900 Equipment Accumulated Depreciation, Equipment Accounts Payable Unearned Service Revenue 48,000 $ 12,000 5,400 2,100 Interest Payable 750 Dividends Salary Payable Notes Payable Common Stock Retained Earnings Service Revenue 1,800 12,000 20,000 8,200 14,000 97,000 Interest Revenue 650 Salary Expense 51,000 Rent Expense 18,000 Depreciation Expense, Equipment 4,200 Utilities Expense 2,700 Interest Expense 1,300 Supplies Expense 700 Total $159,900 $159,900