Mystic Masters, Inc., provides fortune-telling services over the Internet. In recent years the company has experienced severe nancial difculty. Its accountant prepares adjusting entries on a monthly basis, and closing entries on an annual basis, at December 31. An adjusted trial balance dated December 31. 2015, follows. MYSTIC MASTERS. INC. Adjusted Trial Balance December 31, 2015 Debits Credits Cash 5 950 Accounts receivable 300 Unexpired insurance 2.000 Prepaid rent 1,500 Supplies 200 Furniture and xtures 0.400 Accumulated depreciation: furniture and xtures $ 5,200 Accounts payable 6,540 Notes payable 24,000 Salaries payable 1,?00 Interest payable 350 Uneamed client revenue 200 Capital stock 4,000 Retained earnings 2,000 Client revenue eamed 52,000 Insurance expense 5,000 Ofce rent expense 0,000 Supplies expense 440 Salary expense 40,000 Depreciation expense: furniture and xtures 1 ,400 Ofce and telephone expense 3,000 Internet service expense 4,900 Legal expense 1,500 Interest expense 4,000 Miscellaneous expense 5,000 $ 96,500 $ 90,600 (Hint: The company incurred no income taxes expense in 215.] a-'I . Prepare an income statement for the year ended December 31. 2015. Expenses: \fa-3. Prepare the company's balance sheet dated December 31. 2015. [Amounts to be deducted should be Indicated with a minus sign.) H Furniture 8. xtures Total assets Liabllltlsa: Total liabilities Stuckhnldem' equity: Tutsi stockholders' equity Tutsi liabilities and stunkhulders' equity \fd. Using the nancial statements prepared in part a. briefly evaluate the company's performance. (Enter your answers as a percentage rounded to the nearest whole number.) e. Identify information that the company is apt to disclose in the notes that accompany the nancial statements prepared in part a. 6 Finer-u File Edit View History Bookmarks Tools Window Help $1 6) #3 ma-- Mon10:7'PM q 55 ' ' . .I Wmlmwmw )5 El! mannered-d Hum x -meemmmm 2' .G mum-mussels Win x J MmemmI-m-m x I :l- (D 'eztomneduoatlonnorrvhmtpn IS {mas ' (1' Q Search 1} l E u ' E d. Using the nancial statements prepared in part a. briey evaluate the company's performance. (Enter your answers as I percentage rounded to the nearest whole number.) e. Identify information that the company is apt to disclose in the notes that accompany the nancial statements prepared in part a. l II" Ill-ml "II. J L U\" u'lullr-II'I J Jaumal Entry Warksheet Q n [9 E5] ' Record the entry to close client revenue earned tn income summary. ' *Enter debits before credits E E L "" __'_____" "__ J L "_" '_"_'_'__"_' J Journal Entry Worksheet Q E] H E] Ream'd the entry to close all expense accounts to income summary. 1 D Dec. 31 *Enter debits before credits Journal Entry Worksheet Q E] E] E Record the entry to transfer a net loss in 2015 to the retained earnings ' account. ' *Enter debits before credits E E
