Question & Answer: Preparing Financial Statements and Closing Procedures Solomon Corporation's adjusted trial balance for the year ending December 31, 2013,…..

Preparing Financial Statements and Closing Procedures Solomon Corporations 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

Question & Answer: Preparing Financial Statements and Closing Procedures Solomon Corporation's adjusted trial balance for the year ending December 31, 2013,..... 1

Question & Answer: Preparing Financial Statements and Closing Procedures Solomon Corporation's adjusted trial balance for the year ending December 31, 2013,..... 2

Question & Answer: Preparing Financial Statements and Closing Procedures Solomon Corporation's adjusted trial balance for the year ending December 31, 2013,..... 3

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.

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