Maria L Montilla Universal Advertising Agency Inc Worksheet

Question

Maria L Montillauniversal Advertising Agency Inc Worksheet December 31 Maria L Montillauniversal Advertising Agency Inc Worksheet December 31 Maria L. Montilla Universal Advertising Agency Inc. is preparing its financial statements as of December 31, 2021. The company has provided an adjusted trial balance with various account balances, including assets, liabilities, equities, revenues, and expenses. The task involves preparing the income statement and the balance sheet based on the adjusted trial balance, ensuring that all accounts are correctly classified, and financial statements are accurately prepared in accordance with accounting principles.

Dr. Jack HW Helper · Accepted Answer

Introduction The preparation of financial statements is a fundamental process for any company to present its financial position and performance. In this paper, we examine the financial data of Maria L. Montilla Universal Advertising Agency Inc. as of December 31, 2021, based on its adjusted trial balance. The focus will be on creating an accurate income statement and balance sheet, which are essential for stakeholders to assess the company's profitability and financial health. Analysis of the Adjusted Trial Balance The adjusted trial balance provided includes various accounts with their respective debit and credit balances. Assets such as Cash ($20,000), Advertising Supplies ($5,500), Prepaid Insurance ($2,250), and Office Equipment ($7,000) are reported. These are classified as current or non-current assets based on their liquidity and useful life. Liabilities include Notes Payable ($13,250), Accounts Payable ($4,400), and Unearned Revenue ($3,400). Equity is represented by Common Stock ($13,000) and Dividends ($950). Revenue from services is recorded at $13,150, while expenses include Salaries Expense ($8,500) and Rent Expense ($3,000), totaling $11,500. Preparation of the Income Statement The income statement summarizes revenues and expenses to determine net income for the period. Revenue from service is $13,150. Total expenses amount to $11,500, comprising salaries and rent. The net income is calculated as follows: Net Income = Total Revenues - Total Expenses = $13,150 - $11,500 = $1,650 Preparation of the Balance Sheet The balance sheet provides a snapshot of the company's financial position. Assets include Cash ($20,000), Advertising Supplies ($5,500), Prepaid Insurance ($2,250), and Office Equipment ($7,000). Liabilities include Notes Payable ($13,250), Accounts Payable ($4,400), and Unearned Revenue ($3,400). Shareholders' equity consists of Common Stock ($13,000) and retained earnings, which can be computed as follows: Retained Earnings at year-end = Beginn

Maria L Montilla Universal Advertising Agency Inc Worksheet

Maria L Montillauniversal Advertising Agency Inc Worksheet December 31

Paper For Above instruction

Preparation of the Income Statement

Preparation of the Balance Sheet

Conclusion

References