Below is the complete list of accounts of cobras incorporated and the related balance at the end of march. all accounts have their normal debit or credit balance. supplies, $1,100; buildings, $38,000; salaries payable, $300; common stock, $18,000; accounts payable, $1,350; utilities expense, $2,000; prepaid insurance, $1,100; service revenue, $17,800; accounts receivable, $2,500; cash, $1,800; salaries expense, $4,700; retained earnings, $13,750. required: prepare a trial balance with the list of accounts in the following order: assets, liabilities, stockholders' equity, revenues, and expenses.

See attached file

Explanation:

Revenues and Expenses arise from equity variations, which produce changes in stockholders' equity.

Capital contributions increase the stockholders' equity, but they are not revenues. Benefit distributions among owners are decreases but they are not expenses.

Revenues are caused by increases in assets or decreases in liabilities that are generated by operations or economic events over a period of time. The Expenses, are constituted by all the costs incurred in the activities of the company.

As a result we can get the expanded accounting equation:

ASSETS = LIABILITIES + STOCKHOLDERS´ EQUITY + REVENUES – EXPENSES

Also:  

Net Income = Income − Expenses

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