Question

Preparing Financial Statements from a Trial Balance The following accounts are taken from Equilibrium Riding Inc., a company that specializes in occupational therapy and horseback riding lessons, as of December 31. EQUILIBRIUM RIDING, INC. Unadjusted Trial Balance At December 31 Account Name Debits Credits Cash 59,750 Accounts Receivable 3,300 Prepaid Insurance 4,700 Equipment 64,600 Land 23,000 Accounts payable 29,230 Deferred Revenue 1,500 Notes Payable (long-term) 74,000 Common Stock 5,000 Retained Earnings 14,500 Dividends 0 Service Revenue 35,700 Salaries and Wages Expense 3,900 Repairs and Maintenance Expense 410 Office Expense 270 Totals $159,930 $159,930 Required: Based on the information provided, you are required to Prepare an Income Statement for the year ending December 31; Calculate the Net Profit Margin; and Briefly explain what the profit margin means.

          Preparing Financial Statements from a Trial Balance
The following accounts are taken from Equilibrium Riding Inc., a
company that specializes in occupational therapy and horseback
riding lessons, as of December 31.
EQUILIBRIUM RIDING, INC.
Unadjusted Trial Balance
At December 31
Account Name
Debits
Credits
Cash
59,750
Accounts Receivable
3,300
Prepaid Insurance
4,700
Equipment
64,600
Land
23,000
Accounts payable
29,230
Deferred Revenue
1,500
Notes Payable (long-term)
74,000
Common Stock
5,000
Retained Earnings
14,500
Dividends
0
Service Revenue
35,700
Salaries and Wages Expense
3,900
Repairs and Maintenance Expense
410
Office Expense
270
Totals
$159,930
$159,930
Required: Based on the information provided, you are required
to
Prepare an Income Statement for the year ending December
31;
Calculate the Net Profit Margin; and
Briefly explain what the profit margin means.

Added by Rebecca L.

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