Sugar Rush, Inc. opens its first ice cream store in January 2022. It prepares quarterly financial statements for its owners and external stakeholders.

Below is the unadjusted trial balance of Sugar Rush at the end of the 2nd quarter of its first year of operation (April 1- June 30, 2022).

Unadjusted Trial Balance

At June 30, 2022

Cash $ 17,000.00

Accounts Receivable $ 600.00

Prepaid Rent $ 7300.00

Equipment $9700.00

Trademark $9700.00

Accounts Payable $10,800.00

Deferred Revenue $ 400.00

Loan Payable (Long-term) $20,000.00

Common Stock $10,000.00

Retained Earnings, April 1, 2022 $ 1,100.00

Dividends $300.00

Sales Revenue $11,300.00

Cost of Ingredients $4,500.00

Salaries and Wages $3,200.00

Utility Expense $700.00

Rent Expense $600.00

TOTAL: $53,600.00 $53,600.00

Based on the unadjusted trial balance of Sugar Rush, Inc. above, you are required to prepare/write the following:

1) An income statement

2) A statement of retained earning

3) Balance Sheet

4) A paragraph stating your evaluation of the company’s performance and financial status for the quarter ending June 30, 2022. 

In your evaluation, state whether:

o the business is profitable;

o it is able to pay its current obligations/liabilities, and o its assets are financed more by debts or equity.

You may state any other insights you have on the company’s financial statements. Justify your evaluation and support your discussion with relevant calculations or ratios.