Preparation of Financial Statements
Using the Adjusted Trial Balance Shown

Preparation of financial statements
Using the Adjusted Trial Balance shown below, prepare (a) an Income Statement and (b) a Statement of Retained Earnings for All Star Repairs.
$\begin{array}{|l|l|l|}\hline & \text { Debit } & \text { Credit } \\\hline \text { Cash } & \$ 20,200 & \\\hline \text { Accounts receivable } & 70,600 & \\\hline \text { Supplies } & 2,500 & \\\hline \text { Shop equipment } & 26,600 & \\\hline \text { Accumulated depreciation: shop equipment } & & \$ 9,600 \\\hline \text { Accounts payable } & & 18,000 \\\hline \text { Notes payable } & & 3,700 \\\hline \text { Income taxes payable } & & 26,700 \\\hline \text { Capital stock } & & 22,200 \\\hline \text { Retained earnings } && 5,900 \\\hline \text { Dividends } & 16,700 \\\hline \text { Fees earned } & & 127,400 \\\hline \text { Rent expense } & 9,000 & \\\hline \text { Wages expense } & 35,600 & \\\hline \text { Supplies expense } & 2,900 & \\\hline \text { Utilities expense } & 2,100 & \\\hline \text { Depreciation expense: shop equipment } & 600 & \\\hline \text { Income taxes expense } & \underline{26,700} & \\\hline & \underline{\$ 213,500} & \$ 213,500 \\\hline\end{array}$