1. Income Statement: Total expenses 54,160 and Net sales $87,950.
2. Statement of Owner's Equity: Balance, end of month $110,655
3. Balance sheet
Total assets $149,360
Total liabilities and owner's equity $149,360
To prepare the income statement, statement of owner's equity, and balance sheet using the adjusted trial balance provided, we will follow these steps:
Income Statement:
Calculate the net income or loss by subtracting the total expenses from the total revenues.
Include the owner's draw from the statement of owner's equity.
Statement of Owner's Equity:
Calculate the ending balance of the owner's equity by adding the net income or loss from the income statement to the beginning balance of the owner's equity and any contributions or withdrawals made by the owner.
Balance Sheet:
Calculate the total assets by adding the total liabilities and the owner's equity.
Organize the financial statements into the required sections (assets, liabilities, and equity).
The income statement, statement of owner's equity, and balance sheet for MC Tutoring Plus, as of July 31, 20X1.
Income Statement
For the Month Ended July 31, 20X1
Revenue
Sales $99,550
Less: Sales discounts 600
Less: Sales returns and allowances 11,000
Net sales $87,950
Expenses
Cost of merchandise sold $30,520
Office salaries expense 6,250
Office rent expense 1,000
Store rent expense 5,500
Sales salaries expense 8,000
Advertising expense 1,500
Office supplies expense 1,240
Miscellaneous selling expense 150
Total expenses 54,160
Net income $33,790
Statement of Owner's Equity
For the Month Ended July 31, 20X1
Marissa Chianese, Capital
Balance, beginning of month $80,865
Add: Contributions 1,000
Add: Net income 33,790
Less: Drawings 5,000
Balance, end of month $110,655
Balance Sheet
As of July 31, 20X1
Assets
Cash $27,875
Accounts receivable 23,500
Supplies 2,000
Prepaid insurance 2,560
Equipment 96,000
Less: Accumulated depreciation 36,125
69,875
Land 23,550
Total assets $149,360
Liabilities and Owner's Equity
Liabilities:
Accounts payable $23,605
Salaries payable 500
Unearned revenues 5,600
Total liabilities $29,705
Owner's equity:
Marissa Chianese, Capital 110,655
Total owner's equity 110,655
Total liabilities and owner's equity $149,360