Question

The following information is available for Sheridan Company $6,370 3.790 800 Accounts receivable $3,100 Cash Accounts payable 4,100 Supplies Interest payable 580 Unearned service revenue Salaries and wages expense 4.100 Service revenue Notes payable 33,000 Salaries and wages payable Common stock 58,500 Depreciation expense Inventory 2,900 Equipment (net) 42,500 870 710 109,200 Using the information above, prepare a balance sheet as of December 31, 2022. (List assets in order of liquidity.) Sheridan Company Balance Sheet December 31, 2022 cash Liabilities and Stockholders' Equity

Answer 1

NOTE: Sheridan Company Balance Sheet December 31, 2022 Assets Cash Accounts Receivable Supplies Inventory Equipment, net Total Assets $6,370 $3,100 $3,790 $2,900 $109,200 $125,360 Service revenue is a nominal item and so it shall be reported as income on the income statement. Salaries and wages expense and Depreciation expense are nominal items to be reported as expenses on income statement. So, these items are not reported on balance sheet. Workings: $125,360 Liabilities & Shareholders' Equity Liabilities: Accounts payable $4,100 Salaries and wages payable $870 Interest payable $580 Unearned service revenue $800 Notes payable $33,000 Total Liabilities Shareholders' Equity: Common Stock $58,500 Retained Earnings $27,510 Total Shareholders' Equity Total Liabilities & Shareholders' equity Total assets Less: Total liabilities Common stock Retained earnings $39,350 $39,350 $58,500 $27,510 [Ref: Workings] $86,010 $125,360