The adjusted trial balance for Destination Realty, Inc., at October 31, 2010, follows:

Requirements 1. Prepare Destination Realty’s income statement, statement of retained earnings, and year-end balance sheet. List expenses in decreasing order on the income statement.
2.

a. Which financial statement reports Destination Realty’s results of operations? Were operations successful during 2010? Cite specifics from the financial statements to support your evaluation.

b. Which statement reports the company’s financial position?

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Destination Realty, Inc. Adjusted Trial Balance October 31, 2010 ACCOUNT Cash Accounts Receivable Prepaid Rent Supplies DEBIT CREDIT $ 6,500 12,100 2,500 500 Equipment Accumulated Depreciation, Equipment Accounts Payable Unearned Service Revenue 42,500 $ 11,300 4,300 2,800 Interest Payable 720 Salary Payable Notes Payable Common Stock Retained Earnings Dividends Service Revenue 9,000 8,000 3,960 9,700 5,000 85,000 Interest Revenue 420 20 Salary Expense 40,000 Rent Expense 20,000 Depreciation Expense, Equipment 2,500 Utilities Expense 1,800 Interest Expense 1,100 Supplies Expense 700 Total $135,200 $135,200