he adjusted trial balance of Karise Repairs on December 31 follows. KARISE REPAIRS Adjusted Trial Balance December 31 Number Account Title Debit Credit 101 Cash $ 65,000 124 Office supplies 1,200 128 Prepaid insurance 2,050 167 Equipment 53,000 168 Accumulated depreciation—Equipment $ 5,300 201 Accounts payable 13,500 210 Wages payable 700 301 C. Karise, Capital 38,000 302 C. Karise, Withdrawals 18,500 403 Services revenue 144,550 612 Depreciation expense—Equipment 5,300 623 Wages expense 38,000 637 Insurance expense 1,100 640 Rent expense 10,500 650 Office supplies expense 3,100 690 Utilities expense 4,300 Totals $ 202,050 $ 202,050 Note: C. Karise, Capital account balance was $38,000 on December 31 of the prior year, and there were no owner investments during the year. Required: 1a. Prepare an income statement for the year. 1b. Prepare a statement of owner's equity for the year. 1c. Prepare a classified balance sheet at December 31. 2. Prepare the December 31 closing entries. Please dont provide solution image based answers thank you
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
The adjusted
| KARISE REPAIRS | |||
|---|---|---|---|
| Adjusted Trial Balance | |||
| December 31 | |||
| Number | Account Title | Debit | Credit |
| 101 | Cash | $ 65,000 | |
| 124 | Office supplies | 1,200 | |
| 128 | Prepaid insurance | 2,050 | |
| 167 | Equipment | 53,000 | |
| 168 | $ 5,300 | ||
| 201 | Accounts payable | 13,500 | |
| 210 | Wages payable | 700 | |
| 301 | C. Karise, Capital | 38,000 | |
| 302 | C. Karise, Withdrawals | 18,500 | |
| 403 | Services revenue | 144,550 | |
| 612 | Depreciation expense—Equipment | 5,300 | |
| 623 | Wages expense | 38,000 | |
| 637 | Insurance expense | 1,100 | |
| 640 | Rent expense | 10,500 | |
| 650 | Office supplies expense | 3,100 | |
| 690 | Utilities expense | 4,300 | |
| Totals | $ 202,050 | $ 202,050 |
Note: C. Karise, Capital account balance was $38,000 on December 31 of the prior year, and there were no owner investments during the year.
Required:
1a. Prepare an income statement for the year.
1b. Prepare a statement of owner's equity for the year.
1c. Prepare a classified
2. Prepare the December 31 closing entries.
Please dont provide solution image based answers thank you
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