Ella Mendes prepared the following trial balance for her yoga studio, Mindful Meditation, for the year ended December 31, 2021.

Instructions

Use the trial balance to do the following:

a. Prepare an income statement for Mindful Meditation for the year ended.

b. Prepare a statement of owner?s equity.

c. Prepare a balance sheet.

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:

MINDFUL MEDITATION Trial Balance December 31, 2021 Debit Credit $ 12,230 5,400 Cash Accounts receivable Supplies Prepaid insurance Equipment Accounts payable Notes payable E. Mendes, capital E. Mendes, drawings Service revenue 1,120 2,145 15,200 $ 3,260 10,000 16,845 24,000 85,050 Interest expense 550 Rent expense Salaries expense Telephone expense 15,500 36,500 2,510 $115,155 $115,155