Question 1. 1. (TCO C) Flynn Design Agency was founded by Kevin Flynn in January 2009. Presented below is the adjusted trial balance as of December 31, 2010.

Flynn Design Agency

Adjusted Trial Balance

December 31, 2010

Account Titles

Dr

Cr

Cash

$10,000

Accounts Receivable

21,500

Art Supplies

5,000

Prepaid Insurance

2,500

Printing Equipment

68,000

Accumulated Depreciation

$35,000

Accounts Payable

8,000

Interest Payable

150

Notes Payable

5,000

Unearned Advertising Revenue

5,600

Salaries Payable

1,300

Common Stock

10,000

Retained Earnings

3,500

Advertising Revenue

71,500

Salaries Expense

14,300

Insurance Expense

850

Interest Expense

500

Depreciation Expense

10,000

Art Supplies Expense

3,400

Rent Expense

4,000

Total

$140,050

$140,050

Prepare a single-step income statement for the year ending December 31, 2010. (Points : 15)

Question 2

The adjusted trial balance of Cavamanlis Co. as of December 31, 2011 contains the following.

Account Titles

Dr

Cr

Cash

$18,972

Accounts Receivable

9,920

Prepaid Rent

2,280

Equipment

18,050

Accumulated Depreciation

$4,895

Notes Payable

5,700

Accounts Payable

4,472

Common Stock

20,000

Retained Earnings

11,310

Dividends

3,000

Service Revenue

15,590

Salaries Expense

6,840

Rent Expense

2,760

Depreciation Expense

145

Interest Expense

83

Interest Payable

83

$62,050

$62,050

Instructions

Prepare in good form a balance sheet for the year ended December 31, 2011. (Points : 15)