M3-21 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. Account Name Cash Accounts Receivable Prepaid Insurance Equipment Land EQUILIBRIUM RIDING, INC. Unadjusted Trial Balance At December 31 Accounts Payable Deferred Revenue Notes Payable (long-term) Common Stock Debits Credits $ 59,750 3,300 4,700 64,600 23,000 $ 29,230 1,500 74,000 5,000 14,500 0 35,700 Retained Earnings Dividends Service Revenue Salaries and Wages Expense 3,900 Repairs and Maintenance Expense 410 Office Expense 270 Totals $159,930 $159,930 Required: Using the unadjusted trial balance provided, create a classified Balance Sheet, Statement of Retained Earnings, and Income Statement for Equilibrium Riding, Inc., for the year ended December 31. (These financial statements would be considered "preliminary" because they use unadjusted balances.) TIP: Create the Income Statement first, followed by the Statement of Retained Earnings, and finally the classified Balance Sheet. Follow the formats presented in Exhibits 1.3, 1.4, and 2.13. Calculating Not Profit Margin 10: