The Garment Tree Ltd. sells clothing. At the end of 2011, it had the following account balances:
Accounts receivable……………………………………$ 9,000
Rent expense…………………………………………… 12,000
Inventory………………………………………………. 18,000
Retained earnings……………………………………… 11,000
Advertising expense…………………………………… 5,000
Cash…………………………………………………… 6,000
Wages expense………………………………………... 32,000
Dividends declared…………………………………… 1,000
Miscellaneous expense………………………………... 3,000
Wages payable………………………………………… 2,000
Share capital…………………………………………... 15,000
Prepaid rent…………………………………………… 1,000
Cost of goods sold……………………………………. 57,000
Accounts payable……………………………………… 6,000
Sales……………………………………………………. 110,000
Required:
a. Prepare a statement of earnings for the year ended December 31, 2011.
b. In answering part "a," you did not need to use all the accounts provided. For each item that you did not use, explain why you did not include it on the statement of earnings.