Problem 3-13A Preparing financial statements from the adjusted trial balance LO7

CHECK FIGURES: a. Profit = $84,925; c. Total assets = $264,500

This alphabetized adjusted trial balance is for GalaVu Entertainment as of its December 31, 2020, year-end:

	Debit	Credit
Accounts payable .......................................................		$ 44,000
Accounts receivable ...................................................	$ 18,700
Accumulated depreciation, automobiles ...................		69,000
Accumulated depreciation, equipment ......................		20,500
Advertising expense...................................................	9,000
Automobiles...............................................................	140,000
Cash............................................................................	11,000
Depreciation expense, automobiles ...........................	13,200
Depreciation expense, equipment ..............................	4,100
Equipment .................................................................	65,000
Revenue .....................................................................		240,000
Interest income ..........................................................		150
Interest expense .........................................................	3,500
Interest payable ..........................................................		75
Interest receivable ......................................................	300
John Conroe, capital ..................................................		23,000
John Conroe, withdrawals .........................................	19,000
Land ...........................................................................	35,000
Long-term notes payable ...........................................		115,000
Notes receivable (due in 90 days) ..............................	80,000
Office supplies ...........................................................	4,000
Office supplies expense .............................................	13,000
Repairs expense, automobiles ...................................	8,400
Salaries expense ........................................................	76,225
Salaries payable .........................................................		5,500
Unearned revenue ......................................................		11,000
Wages expense ...........................................................	27,800
Totals .........................................................................	$528,225	$528,225

Required

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Use the information in the trial balance to prepare:

1. The income statement for the year ended December 31, 2020.

2. The statement of changes in equity for the year ended December 31, 2020, assuming that the owner made additional investments of $15,000 during the year.

3. The balance sheet as of December 31, 2020.

Analysis Component:

The owner, John Conroe, is very pleased with the change in the businesss financial position. Specifically, he noted that his equity increased. My banker told me that as long as equity is increasing, my business is doing great. Comment.