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29 April, 15:47

Wolfpack Construction has the following account balances at the end of the year. Accounts Balances Equipment $ 18,500 Accounts payable 1,500 Salaries expense 25,500 Common stock 10,000 Land 10,500 Notes payable 12,500 Service revenue 31,500 Cash 4,500 Retained earnings? Required: Use only the appropriate accounts to prepare a balance sheet.

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  1. 29 April, 19:45
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    Wolfpack Construction

    Balance sheet for the year ended

    Amount in $ Amount in $

    Assets

    Current assets

    Cash 4,500

    Non current assets

    Equipment 18,500

    Land 10,500

    Total Assets 33,500

    Liabilities

    Current liabilities

    Accounts payable 1,500

    Non-current liabilities

    Notes payable 12,500

    Total liabilities 14,000

    Equity

    Common stock 10,000

    Retained earnings 9,500

    Total Equity 19,500

    Total Liabilities and Equity 33,500

    Explanation:

    The balance sheet shows the assets, liabilities and equity of a business. It defines the accounting equation. Assets include cash, equipment, receivables. Liabilities include notes payable, loans, accrued expense etc.

    Assets = Liabilities + Equity

    Equity is made up of common stock and retained earnings

    Retained earnings?

    Equity = $33,500 - $14,000

    = $19,500

    Retained earnings = $19,500 - $10,000

    = $9,500
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