Problem:
Below find a working trial balance for Smith Company.
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Smith Company
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|
31-Dec-12
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|
Trial Balance (accounts in alphabetical order)
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|
Debit
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Credit
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Accounts payable
|
|
67,000
|
|
Accounts receivable
|
24,500
|
|
|
Cash
|
16,700
|
|
|
Common stock
|
|
10,000
|
|
Depreciation expense
|
24,350
|
|
|
Cost of goods sold
|
254,000
|
|
|
Equipment (net of depreciation)
|
296,000
|
|
|
Insurance
|
1,400
|
|
|
Inventory
|
25,000
|
|
|
Long-term debt
|
|
145,000
|
|
Marketing
|
4,500
|
|
|
Paid-in capital
|
|
90,000
|
|
Property taxes
|
8,900
|
|
|
Rent
|
18,000
|
|
|
Retained earnings
|
|
???
|
|
Revenues
|
|
406,000
|
|
Salaries
|
67,500
|
|
|
Utilities
|
6,700
|
|
|
|
|
|
Total
|
747,550
|
718,000
|
Required:
Prepare an income statement and a balance sheet in good format based on the trial balance below.
After you have completed the two statements comment on the success of the company. Write a short story about the company based on the information from the financial statements you just prepared. You may want to include comments about the profitability and debt load of the company.