(Problems 32 through 34 are adapted from problems by George H. Sorter.) Sortus Company presents the following incomplete trial balances as well as a statement of cash receipts and disbursements:

Prepare a combined statement of income and retained earnings for the year of 1979 . (Hint: Set up T-accounts for each of the balance sheet accounts listed in the trial balance and enter the amounts shown on January 1, 1979, and December 31, 1979. Starting with the cash receipts and disbursements for the year, reconstruct the transactions that took place during the year and enter them in the appropriate T-accounts. The effect of earning activities for the year is already reflected in the Retained Earnings account because the trial balance shown is post-closing.)

Transcribed Image Text:

Debits Cash Accounts and Notes Receivable Merchandise Inventory Interest Receivable Prepaid Miscellaneous Services Building, Machinery, & Equipment Total Debits Credits Accounts Payable (Miscellaneous Services) Accounts Payable (Merchandise) Property Taxes Payable Accumulated Depreciation Mortgage Payable Capital Stock Retained Earnings Total Credits 1/1/79 12/31/79 $7 41,000 $ ? 50,000 49,500 52,000 700 500 5,200 47,000 5,500 47,000 S $ 2,500 $ 3,000 41,000 53,000 1,500 1,000 12,000 14,000 30,000 25,000 25,000 25,000 $211,200