Example similar to P3-5A Prepare financial statements from an adjusted trial balance

Homes Inc. specializes in constructing and remodeling homes. Below is the year-end adjusted trial balance of Homes Inc.
HOMES INC.
Adjusted Trial Balance
December 31, 2022
Account Debit Credit
Cash $26,000
Accounts Receivable $25,000
Supplies $32,000
Prepaid Insurance $7,000
Equipment $625,000
Accumulated Depreciation $200,000
Accounts Payable $31,000
Salaries Payable $28,000
Utilities Payable $5,000
Notes Payable (due in 5 years) $150,000
Common Stock $200,000
Retained Earnings $41,000
Dividends $26,000
Service Revenue-new construction $450,000
Service Revenue-remodeling $280,000
Salaries Expense $160,000
Supplies Expense $285,000
Depreciation Expense $50,000
Insurance Expense $25,000
Utilities Expense $42,000
Interest Expense $9,000
Service Fee Expense $73,000
Totals $1,385,000 $1,385,000
Required:
1. Prepare an income statement for the year ended December 31, 2022.
2. Prepare the statement of stockholders’ equity for the year ended December 31, 2022, note that during the
year the company issued additional common stock for $30,000. This amount is included in the amount for
Common Stock in the adjusted trial balance.
3. Prepare the classified balance sheet for the year ended December 31, 2022.
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1. Income statement for the year ended December 31, 2022.

HOMES INC.
Income Statement
For the Year Ended December 31, 2022
Revenues:
Service Revenue - New Construction $450,000
Service Revenue - Remodeling 280,000
Total Revenues $730,000
Expenses:
Salaries Expense $160,000
Supplies Expense 285,000
Depreciation Expense 50,000
Insurance Expense 25,000
Utilities Expense 42,000
Interest Expense 9,000
Service Fee Expense 73,000
Total Expenses $644,000
Net Income $86,000

2. Prepare the statement of stockholders’ equity for the year ended December 31, 2022.

HOMES INC.
Statement of Stockholders' Equity
For the Year Ended December 31, 2022

Total
Common Retained
Stockholders'
Stock Earnings
Equity

Balance at January 1 $170,000 $41,000 $211,000

Issuance of Common Stock $30,000 $30,000
Add: Net Income $86,000 $86,000
Less: Dividends ($26,000) ($26,000)
Balance at December 31 $200,000 $101,000 $301,000