Sally's Salon began operations on January 1 of the current year with an investment by Sally of $21,155 in exchange for common stock. Based on the following trial balance prepare an income statement, statement of retained earnings, and a balance sheet. There were no additional common stock issuances during the year. Sally's SalonTrial BalanceDecember 31Cash$ 6,500?Accounts receivable475?Beauty supplies2,500?Beauty shop equipment17,000?Accounts payable?$ 745Common Stock?21,155Dividends36,000?Revenue earned?72,000Beauty supplies expense3,425?Rent expense6,000?Wages expense22,000?Totals$93,900$93,900
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| Sally's Salon Income Statement For Year Ended December 31 | ||||
| Revenue earned……………... | ? | ? | ? | $72,000 |
| Expenses: | ? | ? | ? | ? |
| Beauty supplies expense…. | ? | $ 3,425 | ? | ? |
| Rent expense………………. | ? | 6,000 | ? | ? |
| Wages expense……………. | ? | 22,000 | ? | ? |
| Total expenses…………….. | ? | ? | ? | 31,425 |
| Net Income………………….. | ? | ? | ? | $40,575 |
| ? | Sally's Salon Statement of Retained Earnings For Year Ended December 31 | ||
| ? | Retained Earnings, January 1……………………. | $0 | ? |
| ? | Plus: Net income………………………………………….. | 40,575 | ? |
| ? | ? | 40,575 | ? |
| ? | Less: Dividends…………………………….. | (36,000) | ? |
| ? | Retained Earnings, December 31………………. | $4,575 | ? |
Balance Sheet
At December 31
| Assets | ? | Liabilities | ? |
| Cash…………………….. | $ 6,500 | Accounts payable………… | $ 745 |
| Accounts receivable…….. | 475 | ? | ? |
| Beauty supplies…………. | 2,500 | Equity | ? |
| Beauty shop equipment…. | 17,000 | Common Stock…… | 21,155 |
| ? | ? | Retained Earnings…… | 4,575 |
| ? | ? | Total stockholders' equity | 25,730 |
| Total assets……………… | $26,475 | Total liabilities and equity. | $26,475 |
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