Question 1

ABC is a start-up company, it started operations in 2018 with the following trial balance information:

	Debit	Credit
Cash	$ 100,000
Accounts receivable	$ 300,000
Land	$ 600,000
Accounts payable		$ 240,000
Loan payable		$ 120,000
Capital stock		$ 200,000
Retained earnings		$ 440,000
Dividend
Revenues
Salaries expenses
Suppliers expenses
Interest expenses
	$ 1,000,000	$ 1,000,000

The following transactions are carried out in 2021:

Feb. 2. $40,000 on account receivable.

Feb. 3 Purchased additional land for $80,000 in cash.

Mar. 5 Provided services on account to a customer for $60,000.

Mar. 7 Borrowed $48,000 on a term loan payable.

Jun. 11 Paid salaries of $12,000.

Jun. 12 Provided services to customers for cash, $44,000.

Jul. 15 Purchased (and used) office supplies on account, $8,000.

Jul. 17 The company paid shareholders $10,000 dividend.

Jul. 20 Paid rent of $6,800.

Jul. 23 Paid salaries of $16,000.

Sep. 24 Paid $64,000 on the open accounts payable.

Sep. 29 Collected $200,000

Nov. 31 Repaid loans of $88,000.

Dec. 19 Paid interests on loans of $2,400.

Required:

1. Prepare the trial balance as of the end of 2018
2. Prepare the balance sheet
3. Prepare the income statement