Question 1: Financial Statements (22 marks)

The adjusted trial balance for Markle Company as of December 31, 2019 is as follows:

Markle COMPANY

Adjusted Trial Balance

Year Ended December 31, 2019

Accounts Debit Credit

Cash $ 10,000

Accounts Receivable 14,000

Supplies 2,000

Prepaid Insurance 8,000

Computer Equipment 125,000

Accum. AmortizationComputer Equipment $ 25,000

Accounts Payable 15,000

Note Payable, due Dec 31 2022 22,000

Salaries Payable 24,000

J. Yan, Capital 30,000

J. Yan, Drawings 1,500

DVD Rental Revenue 82,500

Advertising Expense 2,000

Amortization Expense 5,000

Insurance Expense 3,000

Rent Expense 8,000

Salaries Expense 16,000

Supplies Expense 4,000

Totals $ 198,500 $198,500

1. Compute the Net Income
2. Compute the Ending Capital Balance
3. Prepare a classified balance sheet for Markle Company, in GOOD FORM.