The following are the accounts of Unique Ad, an agency that develops marketing materials for print, radio,

Question:

The following are the accounts of Unique Ad, an agency that develops marketing materials for print, radio, and television. The agency’s first year of operations just ended on January 31, 2010.

Accounts Payable ............ $ 19,400

Accounts Receivable ............ 24,900

Advertising Service Revenue ........ 165,200

Cash .................. 1,800

Equipment Rental Expense .......... 37,200

Marketing Expense ............. 6,800

Office Rent Expense ........... 13,500

Owner’s Capital ............. 5,000

Salaries Expense ............. 86,000

Salaries Payable .............. 1,300

Supplies ................. 1,600

Supplies Expense .............. 19,100

Withdrawals ................ 0

*Represents the initial investment by the owner

Required

1. Prepare the income statements, statement of owner’s equity, and balance sheet for Unique Ad.

2. Review the financial statement and comment on the financial challenges Unique Ad faces.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...