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    Creating Financial Statements from an Adjusted Trial Balance

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    Using the adjusted trial balance of Ladner Environmental Services at the end of its year, December 31, 2011:
    1. Prepare Ladner Environmental Services 2011 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. 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. Which financial statement reports Ladner Environmental Services result's of operations? Were 2011 operations successful? Cite specifics from the financial statements to support your evaluation.
    3. Which statement reports the company's financial position? Does Ladner financial position look strong or weak? Give the reason for your evaluation

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    Solution Preview

    Ladner Environmental Services
    Income Statement for the Year-Ended: December 31, 2011

    Service Revenue $780,000

    Salary Expense $320,000
    Rent Expense 48,000
    Amortization Expense - Equipment 36,000
    Utilities Expense 21,600
    Interest Expense 13,200
    Insurance Expense 13,200
    Amortization Expense - Office Furniture 9,600
    Supplies ...

    Solution Summary

    The attached file which contains detailed illustrations and instructions, aids in the preparation of adjusted trial balances and financial statements (including income statements, balance sheets, and statement of owners' equity) in this case for the Ladner Environmental Services Exercise.