Question

Required information Use the following information for Quick Studies below. [The following information applies to the questions displayed below.) The following is the adjusted trial balance of Sierra Company. The Retained Earnings account balance was $5,500 on December 31 of the prior year. Credit Debit $ 5,600 500 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) Common stock Retained earnings Dividends Consulting revenue Wages expense Depreciation expense-Buildings Insurance expense Totals $12,000 2,500 3,000 5,000 5,500 1,000 9,500 3,500 2,eee 1,500 $37,500 $37,500 QS 3-23 Preparing a classified balance sheet LO C3 Use the information adjusted trial balance to prepare Sierra Company's classified balance sheet as of December 31

Answer 1

Income Statement
Consulting revenue	9,500
Expenses:
Wages expense	-3,500
Depreciation expense- Building	-2000
Insurance expense	-1500
Total expenses	-7,000
Net Income	$2,500

Statement of Retained Earnings
Beginning retained earnings	5,500
Net Income	2,500
	$8,000
Dividends	-1,000
Retained earnings, Ending	$7,000

Balance Sheet
Assets	Amount	Liabilities + Stockholders Equity	Amount
Current Assets:		Current Liabilities:
Cash	5,000	Accounts payable	2,500
Prepaid insurance	500	Long term liabilities:
Total Current Assets	5,500	Note payable	3,000
Plant,Assets :		Total liabilities	5,500
Building                                        20,000		Equity:
Less:Accumulated Depreciation -12,000	8,000	Common stock	5,000
Total Plant Assets	8,000	Retained earnings	7,000
Note receivable	4,000	Total stockholders equity	12,000
Total Assets	$17,500	Total Liabilities & Stockholders Equity	$17,500

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