Question

M4-16 Reporting a Balance Sheet [LO 4-4]

The Sky Blue Corporation has the following adjusted trial balance at December 31.

	Debit			Credit
Cash	$	1,290
Accounts Receivable		2,600
Prepaid Insurance		2,900
Notes Receivable (long-term)		3,600
Equipment		15,000
Accumulated Depreciation				$	3,800
Accounts Payable					6,020
Salaries and Wages Payable					1,300
Income Taxes Payable					3,500
Unearned Revenue					720
Common Stock					3,000
Retained Earnings					1,240
Dividends		360
Sales Revenue					47,430
Rent Revenue					360
Salaries and Wages Expense		22,800
Depreciation Expense		1,900
Utilities Expense		4,820
Insurance Expense		2,000
Rent Expense		6,600
Income Tax Expense		3,500
Total	$	67,370		$	67,370

  

1.	Prepare a classified balance sheet at December 31. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1

STATEMENT OF INCOME
							Amount $
Sales revenue							47,430
Rent revenue							360
Total revenue							47,790
Less: Operating expense
	Salaries expense			22,800
	Rent Expense			6,600
	Depreciation			1,900
	Insurance expense			2,000
	Utilities expense			4,820			38,120
Net income before tax							9,670
Less: income tax							3,500
Net Income Earned after tax							6,170
STATEMENT OF RETAINED EARNINGS
							Amount $
Beginning balance							1,240
Less: Dividend paid							360
Add: Net income earned							6,170
Ending balance							7,050
BALANCE SHEET
							Amount $
ASSETS:
Current Assets:
	Cash					1,290
	Accounts Receivable					2600
	Notes receivable					3,600
	Prepaid Insurance					2,900	10,390
Fixed Assets:
	Equipment					15,000
	Less: Accumulated Dep					-3,800	11,200
				TOTAL ASSETS			21,590
LIABILITIES:
Current Liabilities:
	Unearned revenue					720
	Income tax payable					3500
	Accounts Payable					6,020
	Salaries payable					1,300	11,540
Stockholder's Equity:
Common Stock						3,000
Retained earnings						7,050	10,050
				TOTAL LIABILITIES			21,590