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Preparing Financial Statements and Closing Procedures Solomon Corporation’s adjusted trial balance for the year ending December 31, 2013, is: Solomon Corporation Adjusted Trial Balance December 31, 2013 Debit Credit $8,800 14,300 171,600 Cash Accounts Receivable Notes Payable Common Stock Retained Earnings Service Fecs Earned Rent Expense Salaries Expense 30,800 22,000 94,600 27,720 156,200 39,600 81,620 15,400 Totals $331,320 S331,320
Expert Answer
Solution:
a) Income Statement
| Solomon Corporation | ||
| Income Statement | ||
| for the year ended Dec.31, 2013 | ||
| Service Fees Earned | $156,200 | |
| Expenses: | ||
| Rent Expense | -39,600 | |
| Salaries Expense | -81,620 | |
| Depreciation Expense | -15,400 | |
| Total Expenses | -$136,620 | |
| Net Income | $19,580 | |
b) Statement of Stockholder’s equity
| Solomon Corporation | |||
| Statement of Stockholder’s Equity | |||
| for the year ended Dec.31, 2013 | |||
| Common Stock | Retained Earnings | Total Stockholder’s equity | |
| Balance at December 31, 2012 | 94,600 | $27,720 | $122,320 |
| Dividends | -$17,600 | ||
| Income earned for year 2013 | $19,580 | ||
| Balance at December 31, 2013 | 94,600 | 29,700 | 124,300 |
c) Balance Sheet
| Assets | Liabilities | |||
| Cash (8800 – Dividend 17600) | -$8,800 | Notes Payable | $22,000 | |
| Accounts Receivable | $14,300 | Total Liabilities | $22,000 | |
| Equipment | $171,600 | |||
| Less: | Equity | |||
| Accumulated Depreciation | $30,800 | Common Stock | $94,600 | |
| Equipment, net | $140,800 | Retained Earnings | $29,700 | |
| Total assets | $146,300 | Total Liabilities and equity | $146,300 | |
Note – Dividend adjustment is creating difference between the totals. It is assumed that Cash Dividend is not deducted from Cash, hence after paying dividend the cash balance is negative -$8800.
