Answer:
With the retained earning of the Income Statement $ 120,700, complete the accounting equation in the Retained Earning section.
2021 Balance Sheet
$14,000 Cash
$168,000 Accounts Receivable
$7,000 Prepaid Rent
$33,000 Supplies
$222,000 TOTAL CURRENT ASSETS
$340,000 Equipment
-$133,000 Accum Depreciation
$207,000 TOTAL NONCURRENT ASSETS
$429,000 TOTAL ASSETS
$11,000 Accounts Payable
$1,900 Interest Payable
$3,000 Salaries Payable
$15,900 TOTAL CURRENT LIABILITIES
$20,000 Note Payable
$20,000 TOTAL NONCURRENT LIABILITIES
$35,900 TOTAL LIABILITIES
$190,000 Common Stock
$203,100 Retained Earnings
$393,100 TOTAL EQUITY
$429,000 TOTAL EQUITY + LIABILITIES
Explanation:
Account of Current Assets , the criteria is to have a liquidity speed less of one year
Cash
Accounts Receivable
Prepaid Rent
Supplies
Account of Non Current Assets , the criteria is to have a liquidity speed more than one year and are known as fixed assets
Equipment
Accum Depreciation
Account of Current Liabilities , the criteria is to have a liquidity speed less of one year
Accounts Payable
Interest Payable
Salaries Payable
Account of Non Current Liabilities, the criteria is to have a liquidity speed more than one year and are known as long term financing
Note Payable
Account of Total Equity
Common Stock
Retained Earnings
Income Statement 2021
Sales $490,000
Depreciation -$35,000
Salaries Expenses -$187,000
Advertising Expenses -$70,000
Rent Expenses -$12,000
Utilities Expenses -$35,000
Net Income Before Taxes and Int $151,000
Interest Expenses -$2,300
Net Income Before Taxes $148,700
Dividends -$28,000
Retained Earnings $120,700
