Rae Services, Inc. provides healthcare diagnostics for patients with autoimmune diseases. At the end of their first year of operations, Rae Services account balances are shown in the adjusted trial balance shown below: 

Rae Services, Inc. Adjusted Trial Balance December 31, 2012
Cash	176,000
Accounts receivable	140,500
Supplies	4,600
Prepaid insurance	2,500
Equipment	88,200
Accumulated depreciation--Equipment		3,800
Accounts payable		67,500
Common stock		250,000
Retained earnings		120,000
Dividends	72,000
Service revenue		230,510
Advertising expense	2,525
Depreciation expense--Equipment	3,800
Insurance expense	1,300
Rent expense	9,600
Salaries expense	166,000
Supplies expense	1,415
Utilities expense	3,370
	671,810	671,810

 

a) Prepare an Income Statement

Rae Services, Inc.
Income Statement
December 31, 2012

Description	Amount	Total
Subcategory, Assets:Current Assets:Expenses:Liabilities:Property, Plant, & Equipment:Stockholder's Equity:
	Single line	Single line
Net IncomeTotal AssetsTotal Current AssetsTotal ExpensesTotal LiabilitiesTotal Liabilities & Stockholder's EquityTotal Property, Plant, & EquipmentTotal Stockholder's Equity		Single lineSingle line
Net IncomeTotal AssetsTotal Current AssetsTotal ExpensesTotal LiabilitiesTotal Liabilities & Stockholder's EquityTotal Property, Plant, & EquipmentTotal Stockholder's Equity		Single lineDouble line

b) Prepare a Statement of Retained Earnings

Rae Services, Inc.
Statement of Retained Earnings
December 31, 2012

Description	Amount
Add: DividendsAdd: Net IncomeLess: DividendsLess: Net IncomeRetained Earnings, beginning balanceRetained earnings, ending balance
Add: DividendsAdd: Net IncomeLess: DividendsLess: Net IncomeRetained Earnings, beginning balanceRetained earnings, ending balance	Single line
	Single line
Add: DividendsAdd: Net IncomeLess: DividendsLess: Net IncomeRetained Earnings, beginning balanceRetained earnings, ending balance	Single line
Add: DividendsAdd: Net IncomeLess: DividendsLess: Net IncomeRetained Earnings, beginning balanceRetained earnings, ending balance	Single line

c) Prepare a Balance Sheet

Rae Services, Inc.
Balance Sheet
December 31, 2012

Description	Amount	Total
Subcategory, Assets:Current Assets:Expenses:Liabilities:Property, Plant, & Equipment:Stockholder's Equity:
Subcategory, Assets:Current Assets:Expenses:Liabilities:Property, Plant, & Equipment:Stockholder's Equity:
	Single line	Single line
Net IncomeTotal AssetsTotal Current AssetsTotal ExpensesTotal LiabilitiesTotal Liabilities & Stockholder's EquityTotal Property, Plant, & EquipmentTotal Stockholder's Equity		Single line
Subcategory, Assets:Current Assets:Expenses:Liabilities:Property, Plant, & Equipment:Stockholder's Equity:
	Single line	Single line
Net IncomeTotal AssetsTotal Current AssetsTotal ExpensesTotal LiabilitiesTotal Liabilities & Stockholder's EquityTotal Property, Plant, & EquipmentTotal Stockholder's Equity		Single lineSingle line
Net IncomeTotal AssetsTotal Current AssetsTotal ExpensesTotal LiabilitiesTotal Liabilities & Stockholder's EquityTotal Property, Plant, & EquipmentTotal Stockholder's Equity		Single line
Subcategory, Assets:Current Assets:Expenses:Liabilities:Property, Plant, & Equipment:Stockholder's Equity:
Subcategory, Assets:Current Assets:Expenses:Liabilities:Property, Plant, & Equipment:Stockholder's Equity:
	Single line	Single line
Net IncomeTotal AssetsTotal Current AssetsTotal ExpensesTotal LiabilitiesTotal Liabilities & Stockholder's EquityTotal Property, Plant, & EquipmentTotal Stockholder's Equity		Single lineSingle line
Net IncomeTotal AssetsTotal Current AssetsTotal ExpensesTotal LiabilitiesTotal Liabilities & Stockholder's EquityTotal Property, Plant, & EquipmentTotal Stockholder's Equity		Single line