Question

The adjusted Trial balance of GaLochka Co as of December 31, 2018, is presented below.

GaLochka Co Adjusted Trial Balance December 31, 2018
Cash	37,944
Accounts Receivable	13,840
Prepaid Rent	4,560
Equipment	36,100
Accumulated Depreciation – Equipment		9,790
Notes Payable		11,400
Accounts Payable		8,944
Interest Payable		166
Share Capital – Ordinary		40,000
Retained Earnings		22,620
Dividends	6,000
Service Revenue		25,180
Salaries and Wages Expense	13,680
Rent Expense	5,520
Depreciation Expense	290
Interest Expense	166
TOTAL	118,100	118,100

Instructions:

1. Prepare income statement

2. Prepare a retained earnings statement

3. Prepare a classified balance sheet

Answer 1

Answer 1.

Income Statement
Expense	Amount	Income	Amount
To salaries and wages	13,680	By Service Revenue	25,180
To Rent expenses	5,520
To Depriciation Expense	290
To Interest Expenses	166
To Net Profit	5,524
Total	25,180	Total	25,180

Answer 2.

Retained Earning Statement
Particular	Amount	Particular	Amount
To Dividend	6,000	By Bal B/d	22,620
To Transfer to Balance sheet	22,144	By P&L a/c	5,524
Total	28,144	Total	28,144

Answer 3.

Balance Sheet
Liability	Amount	Asset	Amount
Share Capital – Ordinary	40,000	Cash	37,944
Retained Earning	22,144	Accounts Receivable	13,840
Notes Payable	11,400	Equipment- Accumulated Depreciation	26,310
Accounts Payable	8,944	Prepaid Rent	4,560
Interest Payable	166
Total	82,654	Total	82,654