Using the information from Problem 4-4B, prepare an income statement and a statement of changes in equity for the year ended December 31, 2020, and a classified balance sheet at December 31, 2020. The owner made no investments during the year.

Analysis Component: Dillan?s Tailoring Services experienced a profit during 2020. If you were one of the business?s creditors, would you conclude that because of this profit Dillan?s Tailoring will pay its obligations in 2021?

Problem 4-4B

The adjusted trial balance for Dillan?s Tailoring Services on December 31, 2020, appears as follows:

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No. Account Debit Credit $ 15,500 101 Cash Store supplies. 6,500 125 3,800 128 Prepaid insurance. Equipment. 167 61,000 $ 19,700 168 Accumulated depreciation, equipment. Accounts payable. 201 39,400 210 Wages payable. 6,400 Vy Dillan, capital. 23,300 301 302 Vy Dillan, withdrawals. 32,000 Sewing revenue. Depreciation expense, equipment. 401 109,920 612 5,400 623 Wages expense. 61,200 2,200 637 Insurance expense. 640 Rent expense.. 4,800 Store supplies expense.. 651 2,600 Utilities expense. 690 3,720 $198,720 $198,720 Totals .