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Lesson 1: Course Orientation and Review of Accounting Cycle
Statement Preparation
Financial statements are normally prepared directly from the account balance information contained in the adjusted trial balance. The statements include the following:
- Income Statement
- Statement of Retained Earnings
- Balance Sheet
Income Statement
| Revenues |
-
|
-
|
|
Revenue
|
-
| $20,000 |
| Expenses |
-
|
-
|
|
Utilities Expense
| $500 |
-
|
|
Supplies Expense
| 800 |
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|
|
Insurance Expense
| 400 |
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|
|
Interest Expense
| 167 |
-
|
|
Depreciation Expense, Equipment
| 9,600 |
|
|
Depreciation Expense, Truck
| 5,000 |
|
| Total Expenses |
-
| 16,467 |
| Net Income |
-
| $3,533 |
Statement of Retained Earnings
| Retained Earnings 12/1/20XX |
-
| $0 |
| Add: Net Income |
-
| +$3,533 |
| Less: Dividends |
-
| 0 |
| =Retained Earnings 12/31/20XX |
-
| $3,533 |
Balance Sheet
| Assets |
-
| Liabilities |
-
|
| Cash | $82,100 |
Accounts Payable
| $2,000 |
|
Accounts Receivable
| 9,000 |
Notes Payable
| 40,000 |
|
Supplies
| 3,200 |
Interest Payable
| 167 |
|
Prepaid Insurance
| 2,000 |
Unearned Revenue
| 6,000 |
| Total Current Assets | $96,300 | Total Liabilities | $48,167 |
|
Truck
| 15,000 | Owners' Equity |
-
|
|
Equipment
| 40,400 |
Common Stock
| 100,000 |
| Total PP&E | $55,400 |
Retained Earnings
| 3,533 |
| Total Assets | $151,700 | Total Owners' Equity | $103,533 |
|
-
|
-
| Total Liabilities & Owners' Equity | $151,700 |