Question

These items are taken from the financial statements of Cullumber Company at December 31, 2022. $88,872 10,584 2,688 9,946 69,216 51,408 655 Buildings Accounts receivable Prepaid insurance Cash Equipment Land Insurance expense Depreciation expense Interest expense Common stock Retained earnings (January 1, 2022) Accumulated depreciation-buildings Accounts payable Notes payable Accumulated depreciation equipment Interest payable Service revenue 4,452 2,184 50,400 33,600 38,304 7,980 78,624 15,725 3,024 12,348

Answer 1

Solution:

Classified Balance Sheet:

Cullumber Company
Balance sheet
For year ended December 31, 2022
Assets
Current assets:
Cash		$          9,946
Accounts Receivable		$        10,584
Prepaid Insurance		$          2,688
Total Current Assets			$          23,218
Property,plant, and equipment:
Land		$        51,408
Building	$        88,872
Less: Accumulated Depreciation-buildings	$      (38,304)	$        50,568
Equipment	$        69,216
Less: Accumulated Depreciation-Equipment	$      (15,725)	$        53,491	$       155,467
Total Assets			$       178,685
Liabilities and stockholder's Equity
Current liabilities:
Accounts Payable		$          7,980
Notes Payable(Short term)		$        11,424
Interest Payable		$          3,024
Total Current Liabilities			$          22,428
Long Term Liabilities:
Notes Payable(Long term)			$          67,200
Total Liabilities			$          89,628
Owner`s Equity:
Common Stock		$        50,400
Retained Earnings ( Note:1)		$        38,657
Total Owner`s Equity			$          89,057
Total liabilities and stockholder's equity			$       178,685

Notes:

1) Retained Earnings Statement

Cullumber Company
Retained Earnings Statement
For year ended December 31, 2022
Beginning Balance	$              33,600
Add:Net Income	$                 5,057
Less:
Dividends (Cash Dividend)	$                        -
Dividends (Stock Dividend)	$                        -
Retained Earnings Closing Balance	$              38,657

2)Income statement

Cullumber Company
Income statement
For year ended December 31, 2022
Revenue
Service Revenue	$                  12,348
Total Revenue (A)	$                  12,348
Operating Expenses
Depreciation Expense	$                    4,452
Insurance Expense	$                        655
Interest Expense	$                    2,184
Total Operating Expense (B)	$                    7,291
Non Operating(or) Other	$                             -
Net Income (A-B)	$                    5,057

3)  $ 11,424 of total notes payable is shown as short term notes payable under current liability and remaining notes payable is posted under long term liabilities.