Question

(The following information applies to the questions displayed below. The following is the adjusted trial balance of Sierra Company. 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 Debit Credit $ 35,000 2,000 7,000 95,000 $ 27,000 10,000 10,500 12,500 20,500 8,500 84,500 5,000 9,500 3.000 $165,000 $165,000 bok cences QS 3-22 Preparing financial statements LO P6 Required (1) Prepare an income statement for the year ended December 31. (2) Prepare a statement of retained earnings for the year ended December 31. Complete this question by entering your answers in the tabs below. < Prev 4 5 of 7 !!! Next > MacBook Air

Answer 1

Question (1) Sierra company

Solution: Part 1.

$ 84,500 Sierra Company Income statement for the year ended Dec. 31 Revenue: Consulting revenue Operating Expense: Wages expense 5000 Depreciation expense-Buildings 9500 Insurance expense Total operating expense Net income 3000 (17,500) 67,000 $

Part 2.

Statement of retained earnings for the year ended Dec. 31 Retained earnings, Beginning Bal. $ 20,500 Net income 67,000 Total available profits 87,500 Dividends (8,500) Retained earnings, Ending Bal. $ 79,000