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16 August, 08:46

These items are taken from the financial statements of Sunland Company on December 31, 2022. Buildings $107,916Accounts receivable 12,852Prepaid insurance 3,264Cash 12,077Equipment 84,048Land 62,424Insurance expense 796Depreciation expense 5,406Interest expense 2,652Common stock 61,200Retained earnings (January 1, 2017) 40,801Accumulated depreciation-buildings 46,512Accounts payable 9,690Notes payable 95,472Accumulated depreciation-equipment 19,094Interest payable 3,672Service revenue 14,994Prepare a classified balance sheet. Assume that $13,872 of the note payable will be paid in 2018. (List current assets in order of liquidity and property plant and equipment in order of the land, buildings, and equipment)

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  1. 16 August, 08:51
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    Balance sheet

    as December 31th, 2018

    Assets

    Current Assets

    Cash 12,077

    Accounts receivable 12,852

    Prepaid insurance 3,264

    Total current 28,193

    Non current Assets

    Land 62,424

    Buildings 107,916

    Acc dep-equipment (19,094)

    Equipment 84,048

    Acc dep-buildings (46,512)

    Total non current 188,782

    Total Assets 216,975

    Liabilities

    Current Liabilities

    Accounts payable 9,690

    Notes payable 13,872

    Interest payable 3,672

    Total current: 27,234

    Non current liabilities

    Note Payable 81,600

    Total Liabilities 108,834

    Equity

    Common stock 61,200

    Retained earnings 46,941

    Total Equity 108,141

    Total Liablities and stockholders equity 216,975

    Explanation:

    We have to determinate net icnoem and add it to the retained earnings.

    Net income:

    Service revenue 14,994

    Insurance expense (796)

    Depreciation expense (5,406)

    Interest expense (2,652)

    Net income 6, 140

    Retained earnings (January 1, 2017) 40,801

    + net income 6,140

    Retained earnings (Dec 31th, 2017) 46,941

    Then we post the assets considerending liquidity.

    We should make sure that liabilities and equity matches assets to know the accounting equation:

    Assets = liabilities + equity is correct.
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