Q22E - Intermediate Accounting (Kieso)

Question

The adjusted trial balance for Ed Bradley Co. is presented in the following worksheet for the month ended April 30, 2017.

ED BRADLEY CO.                                                Worksheet (PARTIAL)                                    For The Month Ended April 30, 2017
	Adjusted Trial Balance		Income Statement		Balance Sheet
Account Titles	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
Cash	18,972
Accounts Receivable	6,920
Prepaid Rent	2,280
Equipment	18,050
Accumulated Depreciation—Equipment		4,895
Notes Payable		5,700
Accounts Payable		4,472
Common Stock		34,960
Retained Earnings—April 1, 2017		1,000
Dividends	6,650
Service Revenue		12,590
Salaries and Wages Expense	6,840
Rent Expense	3,760
Depreciation Expense	145
Interest Expense	83
Interest Payable		83

 

Instructions 

Complete the worksheet and prepare a classified balance sheet.

Step-by-Step Solution

Answer

Net income is $1,762 and the balance sheet total is $41,327

Step 1: Meaning of Balance sheet

An organization's resource, obligation, and equity ending equalizations as of the report's due date have appeared on a balance sheet. As a result, it gives a picture of the assets and liabilities of a company as well as the sum of capital contributed to it.

Step 2: Completing the worksheet and preparing the balance sheet

 

ED BRADLEY CO. Worksheet (PARTIAL) For The Month Ended April 30, 2017
	Adjusted Trial Balance		Income Statement		Balance Sheet
Account Titles	Dr.	Cr.	Dr.	Cr.	Dr.	Cr.
Cash	18,972				18,792
Accounts Receivable	6,920				6,920
Prepaid Rent	2,280				2,280
Equipment	18,050				18,050
Accumulated Depreciation—Equipment		4,895				4,895
Notes Payable		5,700				5,700
Accounts Payable		4,472				4,472
Common Stock		34,960				34,960
Retained Earnings—April 1, 2017		1,000				1,000
Dividends	6,650				6,650
Service Revenue		12,590		12,590
Salaries and Wages Expense	6,840		6,840
Rent Expense	3,760		3,760
Depreciation Expense	145		145
Interest Expense	83		83
Interest Payable		83				83
Total	63,700	63,700	10,828	12,590	52,872	51,110
Net income/ (Net loss)			1,762			1,762
Total			$12,590	$12,590	$52,872	$52,872

 

 

Preparing classified Balance sheet

Ed Bradley Co. Balance sheet April 30,2017
Assets
Current asset
Cash                                                             $18,972
Accounts receivables                                    6,920
Prepaid rent2,280
Total current asset	$28,172
Property, Plant, and Equipment
Equipment                                                             $18,050
Accumulated depreciation-equipment(4,895)	13,155
Total assets	$41,327
Liabilities and stockholders’ equity
Liabilities
Notes payable                                                          $5,700
Accounts payable                                                   4,472
Interest payable     83
Total current liabilities	$10,255
Stockholder’s equity
Common stock                                                        $34,960
Retained earnings(3,888)	31,072
Total liabilities and stockholders equity	$41,327

*Retained earnings calculated as ($1,000+$1,762-$6,650)