Question

These items are taken from the financial statements of Drew Corporation at December 31, 2022.

            Retained earnings (beginning of year)                                              $33,000

            Utilities expense                                                                                     2,000

            Equipment                                                                                            56,000

            Accounts payable                                                                                 15,300

            Cash                                                                                                     15,900

            Salaries and wages payable                                                                  3,000

            Common stock                                                                                     13,000

            Dividends                                                                                              14,000

            Service revenue                                                                                   78,000

            Prepaid insurance                                                                                  3,500

            Maintenance and repairs expense                                                         1,800

            Depreciation expense                                                                            3,300

            Accounts receivable                                                                             14,200

            Insurance expense                                                                                 2,200

            Salaries and wages expense                                                               47,000

            Accumulated depreciation—equipment                                               17,600

Instructions

Prepare an income statement and a retained earnings statement for the year ended December 31, 2022 and a classified balance sheet as of December 31, 2022.

Answer 1

Preparing Income Statement, Statement of Retained Earnings and Classified Balance Sheet:-

Drew Corporation

Income Statement

For the Year Ended December 31,2022

Accounts	Amount	Amount
Revenue:-
Service Revenue	$78,000
Total Revenue		$78,000
Less:- Expenses
Utilities Expense	$2,000
Maintenance and Repairs Expense	1,800
Depreciation Expense	3,300
Insurance Expense	2,200
Salaries and Wages Expense	47,000
Total Expenses		($56,300)
Net Income		$21,700

Drew Corporation

Statement of Retained Earnings

For the Year Ended December 31,2022

Accounts	Amount
Retained Earnings, Beginning	$33,000
Add:- Net Income	21,700
	$54,700
Less:- Dividends	(14,000)
Retained Earnings, Ending	$40,700

Drew Corporation

Balance Sheet

As of December 31,2022

Accounts	Amount	Amount
Assets:-
Current Assets:-
Cash	$15,900
Accounts Receivable	14,200
Prepaid Insurance	3,500
Total Current Assets		$33,600
Property, Plant and Equipment:-
Equipment	$56,000
Less:- Accumulated Depreciation, Equipment	(17,600)
Total Property, Plant and Equipment		$38,400
Total Assets		$72,000
Liabilities and Stockholders Equity:-
Liabilities:-
Current Liabilities:-
Accounts Payable	$15,300
Salaries and Wages Payable	3,000
Total Current Liabilities		$18,300
Stockholders Equity:-
Common Stock	$13,000
Retained Earnings, Ending	40,700
Total Stockholders Equity		$53,700
Total Liabilities and Stockholders Equity		$72,000