Sunland Design was founded by Thomas Grant in January 2011. Presented below is the adjusted trial balance as of December 31, 2020. SUNLAND DESIGN
ADJUSTED TRIAL BALANCE
DECEMBER 31, 2020
Debit Credit
Cash $11,760
Accounts Receivable 22,260
Supplies 5,760
Prepaid Insurance 3,260
Equipment 60,760
Accumulated Depreciation-Equipment $35,760
Accounts Payable 5,760
Interest Payable 228
Notes Payable 7,600
Unearned Service Revenue 6,360
Salaries and Wages Payable 1,496
Common Stock 10,760
Retained Earnings 4,260
Service Revenue 62,260
Salaries and Wages Expense 12,060
Insurance Expense 1,046
Interest Expense 578
Depreciation Expense 9,600
Supplies Expenses 3,400
Rent Expense 4,000
$134,484 $134,00
Instructions
Prepare an income statement and a retained earnings statement for the year ending December 31, 2020, and an unclassified balance sheet at December 31.

Part a

Income Statement                                       $                    $

Service Revenue                                                           62,260

Less Expenses

Salaries and Wages Expense                   12,060

Insurance Expense                                      1,046

Interest Expense                                            578

Depreciation Expense                               9,600

Supplies Expenses                                     3,400

Rent Expense                                             4,000      (30,684)

Net Income                                                                   31,576

Part b

Retained Income Statement                                          $

Beginning Retained Earnings                                    (27,316)

Add Profit for the year                                                31,576

Ending Retained Earnings                                           4,260

Part c

Unclassified Balance Sheet                                         $

ASSETS

Equipment                                                                  60,760

Accumulated Depreciation-Equipment                   (35,760)     25,000

Accounts Receivable                                                                   22,260

Supplies                                                                                          5,760

Prepaid Insurance                                                                          3,260

Cash                                                                                               11,760

TOTAL ASSETS                                                                           68,040

EQUITY AND LIABILITIES

EQUITY

Common Stock                                                                            10,760

Retained Earnings                                                                        4,260

TOTAL EQUITY                                                                           15,020

LIABILITIES

Accounts Payable                                                                        5,760

Interest Payable                                                                              228

Notes Payable                                                                              7,600

Unearned Service Revenue                                                        6,360

Salaries and Wages Payable                                                       1,496

TOTAL LIABILITIES                                                                     21,440

TOTAL EQUITY AND LIABILITIES                                             36,460

Explanation:

The Income Statement shows the Profit earned during the year. Profit = Sales - Expenses

The Retained Earnings Statement Shows the Retained Earnings Balance at end of the year. Retained Earnings Balance = Opening Balance + Profit - Dividends.

The Balance Sheet shows the Asset, Liabilities and Equity balances as at the reporting date.

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