Accounting 31: Financial Accounting and Reporting

Accounting for Sole Proprietorship

Financial Statement Preparation

Activity 2: The Adjusted Trial Balance of XYZ Enterprises showed the following balances on December 31, 2022:

XYZ Enterprises
Adjusted Trial Balance
December 31, 2022

Accounts Payable 174,600.00

Accounts Receivable 124,300.00
Accrued Interest Expense 11,250.00
Accrued Rent Expense 60,000.00
Accumulated Depreciation - Building 90,000.00
Accumulated Depreciation - Equipment 68,000.00
Allowance for Bad Debts 12,000.00
Bad Debts Expense 10,000.00
Building 400,000.00
Cash 74,600.00
Depreciation Expense 54,000.00
Equipment 200,000.00
Freight In 14,200.00
Freight Out 12,000.00
Interest Expense 20,500.00
Interest Income 12,500.00
Jack, Capital 654,100.00
Jack, Drawing 20,000.00
Land 300,000.00
Merchandise Inventory, Beginning 57,800.00
Notes Payable, due December 31, 2024 225,000.00
Notes Receivable, due June 30, 2023 125,000.00
Purchase Discounts 11,300.00
Purchase Returns and Allowances 7,800.00
Purchases 339,000.00
Rent Expense 60,000.00
Salaries Expense 54,000.00
Sales 601,850.00
Sales Discounts 7,800.00
Sales Returns and Allowances 6,200.00
Utilities Expense 49,000.00
Totals 1,928,400.00 1,928,400.00

Merchandise Inventory at the end of the year amounted to 38,900. Prepare the income statement and the statement
of financial position.