4-36 CH A PT E R 4 Completing the Accounting Cycle

c.
Hercules Company
Post-Closing Trial Balance
August 31, 2020
Debit Credit
Cash $10,900
Accounts Receivable 6,200
Equipment 10,600
Accumulated Depreciation—Equipment $ 5,400
Accounts Payable 2,800
Unearned Rent Revenue 1,200
Owner’s Capital 18,300
$27,700 $27,700

Prepare financial statements. 2. (LO 4) Financial Statement The adjusted trial balance for Hercules Company is presented in
Practice Exercise 1.

Instructions
a. Prepare an income statement and an owner’s equity statement for the year ended August 31,
2020. Hercules did not make any capital investments during the year.
b. Prepare a classified balance sheet at August 31, 2020.

Solution
2. a.

Hercules Company
Income Statement
For the Year Ended August 31, 2020
Revenues
Service revenue $42,400
Rent revenue 6,100
Total revenues $48,500
Expenses
Salaries and wages expense 37,100
Utilities expense 10,100
Depreciation expense 2,700
Total expenses 49,900
Net loss $ (1,400)

Hercules Company
Owner’s Equity Statement
For the Year Ended August 31, 2020
Owner’s capital, September 1, 2019 $ 31,700
Less: Net loss $ 1,400
Owner’s drawings 12,000 13,400
Owner’s capital, August 31, 2020 $ 18,300