Sara's Bakery had the following account balances at the end of 2011:
Supplies on hand…………………………………. $ 4,000
Wages expense…………………………………… 42,000
Sales………………………………………………178,000
Cash……………………………………………… 24,000
Supplies used…………………………………….. 14,000
Accounts payable………………………………… 8,000
Rent expense……………………………………... 12,000
Share capital……………………………………… 90,000
Accounts receivable……………………………… 10,000
Cost of goods sold………………………………..101,000
Equipment………………………………………… 95,000
Accumulated depreciation………………………… 7,500
Depreciation expense……………………………… 2,500
Retained earnings…………………………………. 22,500
Dividends declared……………………………….. 2,000
Prepaid rent……………………………………….. 1,000
Wages payable……………………………………. 1,500
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.