Question

Also, how would you make a balance sheet?

Use the following adjusted trial balance of Sierra Company to prepare its (1) income statement and (2) statement of owner's equity for the year ended December 31. The H. Sierra, Capital account balance was $10,500 on December 31 of the prior year. Credit Debit $ 5,000 500 4,000 20,000 Account Title Cash Prepaid insurance Notes receivable (due in 5 years) Buildings Accumulated depreciation-Buildings Accounts payable Notes payable (due in 3 years) H. Sierra, Capital H. Sierra, Withdrawals Consulting revenue Wages expense Depreciation expense-Buildings Insurance expense Totals $12,000 2,500 3,000 10,500 1,000 9,500 3,500 2,000 1,500 $37,500 $37,500

Answer 1

Sierra Company
Income Statement
For the year ended December 31
	$	$
Revenue:
Consulting revenue		9,500.00
Less Expenses:
Wages Expenses	3,500.00
Depreciation expense - Building	2,000.00
Insurance Expenses	1,500.00
Total Expenses		7,000.00
Net Income		2,500.00

Sierra Company
Statement of Owner’s Equity
For the year ended December 31
	$	$
Beginning balance of capital		10,500.00
Add: Net income	2,500.00
Less: Withdrawals during the year	(1,000.00)
		1,500.00
Ending balance of capital on December 31		12,000.00