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
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
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.