The adjusted trial balance of Cook Antique Auctioneers at the end of its year, December 31, 2014, is shown below.

Required
1. Prepare Cook Antique Auctioneers' 2014 income statement, statement of owner's equity, and balance sheet. List expenses in decreasing-balance order on the income statement and show total liabilities on the balance sheet. If your three financial statements appear on one page, draw the arrows linking the three financial statements.
If they are on separate pages, write a short paragraph describing how the three financial statements are linked. How will what you have learned in this problem help you manage a business?
2. a. Which financial statement reports Cook's results of operations? Were 2014 operations successful? Cite specifics from the financial statements to support your evaluation.
b. Which statement reports the company's financial position? Does Cook's financial position look strong or weak? Give the reason for your evaluation.

Transcribed Image Text:

COOK ANTIQUE AUCTIONEERS Adjusted Trial Balance December 31, 2014 Cash 9,400 Accounts receivable 166,000 Prepaid rent 8,000 Supplies 4,200 468,420 Equipment $ 72,000 Accumulated amortization-equipment Office furniture 96,000 Accumulated amortization-office furniture 38,400 Accounts payable 56,000 Uneamed service revenue 8,000 Interest payable 1,100 Salaries payable 4,200 220,000 Notes payable 129,520 A. Cook, capital A. Cook, withdrawals 92,000 780,000 Service revenue Amortization expense equipment Amortization expense-office furniture Salaries expense 36,000 9,600 320,000 Rent expense 48,000 Interest expense 13,200 Utilities expense 21,600 Insurance expense Supplies expense 13,200 3,600 Total $1,309,220 $1,309,220