Question

You are provided with the following information for Sheridan Company, effective as of its April 30, 2017, year-end.

Accounts payable		$ 869
Accounts receivable		935
Accumulated depreciation—equipment		670
Cash		1,395
Common stock		1,275
Cost of goods sold		1,095
Depreciation expense		300
Dividends		360
Equipment		2,545
Income tax expense		200
Income taxes payable		170
Insurance expense		245
Interest expense		435
Inventory		1,092
Land		3,225
Mortgage payable		3,625
Notes payable		186
Prepaid insurance		95
Retained earnings (beginning)		1,600
Salaries and wages expense		665
Salaries and wages payable		257
Sales revenue		5,225
Stock investments (short-term)		1,290

Prepare an income statement for Sheridan Company for the year ended April 30, 2017.

Prepare a retained earnings statement for Sheridan Company for the year ended April 30, 2017. (List items that increase retained earnings first.)

Prepare a classified balance sheet for Sheridan Company as of April 30, 2017. (List current assets in order of liquidity.)

Answer 1

Sheridan Company
Income Statement
For the year ended April 30,2017
Sales Revenue	$ 5225	$ 5225
Expenses
Cost of goods sold	$ 1095
Depreciation	$ 300
Salaries and Wages	$ 665
Insurance	$ 245
Total Expenses		$ 2305
Operating Income		$ 2920
Interest Expense		$ 435
Earnings Before Tax		$ 2485
Income tax		$ 200
Net Income		$ 2285

Retained Earnings Statement as at April 30, 2017
Retained Earnings at the beginning of the period	$ 1600
Add: Net Income	$ 2285
	$3885
Less: Dividends	($ 360)
Retained Earnings at the end of the period	$ 3525

Sheridan Company
Balance Sheet
As at April 30, 2017
Assets			Liabilities
Current Assets			Current Liabilities
Cash	$ 1395		Accounts Payable	$ 869
Short Term stock Investments	$ 1290		Salary Payable	$ 257
Accounts Receivable	$   935		Income tax payable	$ 170	$ 1296
Inventory	$ 1092		Long term Liabilities
Prepaid Insurance	$    95	$ 4807	Notes Payable	$ 186
Long Term Investments			Mortgage Payable	$ 3625	$ 3811
Property, Plant & Equipment			Total Liabilities		$ 5107
Land	$ 3225		Stock Holder’s Equity
Equipment                        $ 2545			Common Stock	$ 1275
Less: Accumulated Dep ($ 670)	$ 1875	$ 5100	Retained Earnings	$ 3525
Intangible Assets			Total Stock Holder’s Equity		$ 4800
Other Assets
TOTAL ASSETS		$ 9907	TOTAL LIABILITIES AND EQUITY		$ 9907