The ledger of Skitch Corp. showed the following balances after adjustment

M2 ♦ SERVICE COMPANY FINANCIAL STATEMENTS

Note: For a problem using the sole proprietorship form of business organization, download PFS from the website for this book found at cengagebrain.com.
Accounts payable    $ 55,600    General expenses    $112,350
Accounts receivable    103,890    Interest expense    6,750
Accumulated depreciation—equipment    26,250
Notes payable    46,335
Cash    80,370    Prepaid insurance    10,125
Common stock    300,000    Retained earnings, July 1, 2011    0
Salaries expense    621,450
Dividends    18,000    Sales    943,500
Equipment    280,000    Advertising expense    138,750

The ledger of Skitch Corp. showed the following balances after adjustment on June 30, 2012, the end of the current fiscal year:
The president of Skitch has asked you to develop a financial statement worksheet (file name FFS) that includes a single-step income statement, a statement of retained earnings, and a balance sheet. This worksheet will allow the financial statements to be prepared quickly by entering account balances in the appropriate cells on the worksheet. Use the information provided as input for your worksheet.
Review the Model-Building Problem Checklist on page 154 to ensure that your worksheet is complete. Print the worksheet when done. Check figure: Total assets, $448,135.
To test your model, use the following data for the year ended June 30, 2013:
Accounts payable    $ 67,050    General expenses    $108,150
Accounts receivable    92,700    Interest expense    9,000
Accumulated depreciation—equipment    52,500
Notes payable    44,085
Cash    72,400    Prepaid insurance    10,800
Common stock    300,000    Retained earnings, July 1, 2012    46,200
Salaries expense    659,835
Dividends    0    Sales    892,500
Equipment    320,000    Advertising expense    129,450
Print the worksheet when done. Check figure: Total assets, $443,400.

Here’s the SOLUTION

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