Prepare the income statement
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Equipment was incorrectly transferred from the ledger as $84,300. It should have been transferred as $76,500.
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Salaries Expense is overstated by $300.
A $200 cash payment for advertising expense was neither journalized nor posted.
A $240 owner’s withdrawal of cash was incorrectly journalized as $2,400.
Service Revenue was understated by $4,500.
A 12-month insurance policy was posted as a $1,800 credit to Prepaid Insurance. Cash was posted correctly.
Prepare the corrected trial balance as of August 31, 2017. Journal entries are not required.
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P2-34A Preparing financial statements from the trial balance and calculating the debt ratio
Learning Objective 4, 5
2. Ending Capital Balance $29,890
The trial balance as of July 31, 2017, for Sandra Sousa, Registered Dietician, is presented below:
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Requirements
1. Prepare the income statement for the month ended July 31, 2017. 2. Prepare the statement of owner’s equity for the month ended July 31, 2017.
The beginning balance of capital was $0 and the owner contributed $24,000 during the month.
3. Prepare the balance sheet as of July 31, 2017. 4. Calculate the debt ratio as of July 31, 2017.
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