00:01
Hello, in this question we have to prepare the balance sheet but before preparing the balance sheet we will first prepare income statement and the statement of retained earnings.
00:11
So first income statement will be prepared.
00:19
Under income statement first head will be of revenue.
00:24
Under revenue there will be service revenue which is given in the question as $7500.
00:32
Then we will list the expenses from the revenue and expenses are supplies expense which is $1000.
00:50
Second is maintenance and repair expense which is $600.
01:06
Advertising expense which is $400.
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Utilities expense which is $300.
01:31
Salaries and wages expense which is $1400.
01:44
Thus total expense will be $3700.
01:55
So the net income by subtracting the total expense from the total revenue it will be $3800.
02:08
Second we will prepare the statement of retained earnings and to calculate the retained earnings first we will mention the retained earnings in opening if any but as per the question there is no opening balance of the retained earnings.
02:47
So we will add the net income directly in it.
02:52
So net income we have calculated as $3800.
02:56
Then we will list the dividends which will be $1400.
03:05
Thus the retained earning closing balance will be $2400.
03:19
Now we are ready to prepare the balance sheet.
03:24
So the balance sheet of elite services company will be as below as on june 30th, 2025.
03:40
First head will be assets.
03:43
Under assets there will be cash, account receivables, supplies, equipment...