Task: Using the adjusted trial balance of Ladner Environmental Services at the end of its year, December 31, 2011:
| Cash |
$ |
9,400 |
|
|
| Accounts Receivable |
|
166,000 |
|
|
| Prepaid Rent |
|
8,000 |
|
|
| Supplies |
|
4,200 |
|
|
| Equipment |
|
468,420 |
|
|
| Accumulated amortization- |
|
|
$ |
72,000 |
| equipment |
|
|
|
|
| Office furniture |
|
96,000 |
|
|
| Accumulated amortization-office furniture |
|
|
|
38,400 |
| Accounts Payable |
|
|
|
56,000 |
| Unearned service revenue |
|
|
|
8,000 |
| Salary Payable |
|
|
|
4,200 |
| Interest Payable |
|
|
|
1,100 |
| Notes Payable |
|
|
|
220,000 |
| Ladner, capital |
|
|
|
129,520 |
| Ladner, withdrawals |
|
92,000 |
|
|
| Service Revenue |
|
|
|
780,000 |
| Amortization Expence-equipment |
|
36,000 |
|
|
| Amortization Expence-office furniture |
|
9,600 |
|
|
| Salary Expense |
|
320,000 |
|
|
| Rent Expence |
|
48,000 |
|
|
| Interest Expence |
|
13,200 |
|
|
| Utilities expense |
|
21,600 |
|
|
| Insurance Expence |
|
13,200 |
|
|
| Supplies expence |
|
3,600 |
|
|
| |
|
|
|
|
| Total |
|
1,309,220 |
|
1,309,220 |
Net Income $314,800
Required to do:
1. Prepare Ladner Environmental Services 2011 income statement, statement of owner's equity, and balance sheet. List expenses in decreasing-balance order on the income statement and show total liabilities on the balance sheet. Write a short paragraph describing how the three financial statements are linked. How will what you have learned in this problem help you manage a business?
2. Which financial statement reports Ladner Environmental Services result's of operations? Were 2011 operations successful? Cite specifics from the financial statements to support your evaluation.
3. Which statement reports the company's financial position? Does Ladner financial position look strong or weak? Give the reason for your evaluation.