Ella Mendes prepared the following trial balance for her yoga studio, Mindful Meditation, for the year ended December 31, 2024.

Instructions

Use the trial balance to do the following:

a. Prepare an income statement for Mindful Meditation for the year ended December 31, 2024.

b. Prepare a statement of owner’s equity for the year ended December 31, 2024.

c. Prepare a balance sheet at December 31, 2024.

Taking It Further

Ella has reviewed the financial statements. She does not understand why the company’s revenue is not equal to the cash she collected from customers. Explain.

Transcribed Image Text:

Cash Accounts receivable Supplies Prepaid insurance Equipment Accounts payable Notes payable E. Mendes, capital E. Mendes, drawings Service revenue Interest expense Rent expense Salaries expense Telephone expense MINDFUL MEDITATION Trial Balance December 31, 2024 Debit $ 12,230 5,400 1,120 2,145 15,200 24,000 550 15,500 36,500 2,510 $115,155 Credit $ 3,260 10,000 16,845 85,050 $115,155