Cash $ 8,600 accounts receivable 16,500 office supplies 2,000 trucks 173,000 accumulated depreciation—trucks $ 35,638 land 75,000 accounts payable 12,600 interest payable 3,000 long-term notes payable 52,000 common stock 31,774 retained earnings 135,500 dividends 19,000 trucking fees earned 135,000 depreciation expense—trucks 22,987 salaries expense 63,315 office supplies expense 13,500 repairs expense—trucks 11,610 totals $ 405,512 $ 405,512 the retained earnings account balance was $135,500 at december 31 of the prior year. (1) prepare the income statement for the year ended december 31. (2) prepare the statement of retained earnings for the year ended december 31.

Net Income $23,588

Retained Earnings $140,088

Explanation:

To calculate the value of the retained earning at the end of the next year it's necessary to find the income of the current year and then deduct the dividends paid during the year, the remaining value adds to the retained earnings.

This value that we get of retained earnings at the end of the year, it's the value missing at the end of the year to explain the accounting equation of Assets = Liabilitites + Equity

Income StatementBlink

Trucking fees earned $ 135,000

Depreciation expenses-$ 22,987

Salaries expenses-$ 63,315

Office Supllies expenses-$ 13,500

Repair expenses-$ 11,610

Income$ 23,588

Retained Earnings Report  

Opening retained earnings$ 135,500

Add: Net Income$ 23,588

Subtotal$ 159,088

Less: Dividens-$ 19,000

Total$ 140,088

BALANCE SHEETSDec 31

Cash  $ 8,600

Accounts Receivable  $ 16,500

Office Supplies  $ 2,000

TOTAL CURRENT ASSETS  $ 27,100

Equipment  $ 173,000

Accum Depreciation Truck  -$ 35,638

Land  $ 75,000

TOTAL NONCURRENT ASSETS  $ 212,362

TOTAL ASSETS  $ 239,462

Accounts Payable  $ 12,600

Interest Payable  $ 3,000

TOTAL CURRENT LIABILITIES  $ 15,600

Long Term Notes Payable  $ 52,000

TOTAL NONCURRENT LIABILITIES  $ 52,000

TOTAL LIABILITIES  $ 67,600

Common Stock  $ 31,774

Retained Earnings  $ 140,088

TOTAL EQUITY  $ 171,862

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