Question

CALCULATOR PRINTER VERSSON BACK NEXT Exercise 2-05 These Items are taken from the financial statements of Sandhill Co. at December 31, 2022 Buildings Accounts receivable $126,960 15,120 Prepaid insurance 3,840 Cash 14,208 98,880 Equipment Land 73,440 Insurance expense 936 Depreciation expense Interest expense Common stock 6,360 3,120 72,000 Retained earnings (January 1, 2022) Accumulated depreciation-buildings Accounts payable 48,000 54,720 11,400 Notes payable 112,320 Accumulated depreciation-equipment 22,464 4,320 Interest payable 17,640 Service revenue Prepare a classified balance sheet. Assume that $16,320 of the note payable will be paid in 2023. (List Current Assets in order of liquidity and Property, Plant and Equlpment in order of Land, Buildings and Equlpment.)

Answer 1

INCOME STATEMENT
	AMOUNT	AMOUNT
Revenue :
Sales Revenue		$             17,640
Less: Expenses
Insurance expenses	$                     936
Depreciation Expenses	$                 6,360
Interest Expenses	$                 3,120
Total Expenses		$             10,416
Net Income		$                7,224
RETAINED EARNING STATEMENT
Opening Balannce	$               48,000
Add: Income of the year	$                 7,224
Closing Retained earning balance	$               55,224
BALANCE SHEET
ASSETS	AMOUNT	AMOUNT	LIABILITIES & SHAREHOLDER'S EQUITY	AMOUNT	AMOUNT
CURRENT ASSETS:			CURRENT LIABILITIES:
Cash	$               14,208		Account Payable	$         11,400
Account Receivable	$               15,120		Notes Payable ($ 112,320 -16320)	$         96,000
Prepaid insurance	$                 3,840		Interest Payable	$           4,320
		$             33,168			$             1,11,720
			LONG TERM LIABILITIES:
			Notes Payable		$                 16,320
FIXED ASSETS
Land		$             73,440
Building	$           1,26,960
Less : Accumulated Depreciation - Equipment	$               54,720	$             72,240	CAPITAL ACCOUNT
Equipment	$               98,880		Common Stock	$         72,000
Less : Accumulated Depreciation - Delivery Vehicles	$               22,464	$             76,416	Retained Earnings	$         55,224	$             1,27,224
TOTAL OF ASSETS		$          2,55,264	TOTAL OF LIABILITES & SAHREHOLDER'S EQUITY		$             2,55,264