Question

Orange Designs provides consulting services related to home decoration. Orange Designs provides customers with recommendations for a full range of home décor, including window treatments, carpet and wood flooring, paint colors, furniture, and much more. Below is the year-end adjusted trial balance of Orange Designs Credits Debits $ 4,900 3,900 1,900 5,900 109,000 ORANGE DESIGNS Adjusted Trial Balance December 31, 2021 Accounta Cash Accounts Receivable Supplies Prepaid Rent Buildings Accumulated Depreciation Accounts Payable Salaries Payable Utilities Payable Notes Payable (due in four years) Common Stock Retained Earnings Service Revenues Salaries Expense Rent Expense Depreciation Expense Supplies Expense Advertising Expense Utilities Expense Interest Expense Totals $ 20,900 2,900 3,900 1,200 19,000 49,000 14,900 115,100 41,900 17,900 6,900 7,900 12,900 11,900 1,900 $226,900 $226,900 Required: 1. Prepare an income statement for the year ended December 31, 2021 2. Prepare the statement of stockholders' equity, note that during the year the company issued additional common stock of $12,000. This amount is included in the amount for Common Stock in the adjusted trial balance. 3. Prepare the classified balance sheet for the year ended December 31, 2021

Answer 1

ORANGE DESIGNS

Income Statement

For the Year Ended December 31,2021

Service Revenue		115100
Expenses:
Salaries Expense	41900
Rent Expense	17900
Depreciation Expense	6900
Supplies Expense	7900
Advertising Expense	12900
Utilities Expense	11900
Interest Expense	1900
Total Expenses		(101300)
Net Income		13800

ORANGE DESIGNS

Statement of Stockholder's Equity

For the Year Ended December 31,2021

	Common Stock	Retained Earnings	Total Stockholder's Equity
Balance at January 1	37000	14900	51900
Additional issue	12000		12000
Net income of the year		13800	13800
Balance at December 31	49000	28700	77700

ORANGE DESIGNS

Balance Sheet

For the Year Ended December 31,2021

Assets	Liabilities
Current Assets:		Current Liabilities:
Cash	4900	Accounts Payable	2900
Accounts Receivable	3900	Salaries Payable	3900
Supplies	1900	Utilities Payable	1200
Prepaid Rent	5900	Total Current Liabilities	8000
Total Current Assets	16600
		Long-term Liabilities:
Long-term Assets:		Notes Payable	19000
Buildings	109000
Accumulated Depreciation	(20900)	Total Liabilities	27000
Total Long-term Assets	88100	Stock Holder's Equity:
		Stock Holder's Equity	77700
Total Assets	104700	Total Liabilities and stockholders Equity	104700