Answer:
China Tea Company
<u>Classified Balance Sheet as at December 31, 2021</u>
ASSETS
<u>Non Current Assets</u>
Equipment $330,000
Accumulated depreciation ($127,000)
Total Non - Current Assets $203,000
<u>Current Assets</u>
Prepaid rent $7,000
Supplies $27,000
Accounts receivable $158,000
Cash $ 16,000
Total Current Assets $208,000
TOTAL ASSETS $411,000
EQUITY AND LIABILITIES
EQUITY
Common stock $180,000
Retained Earnings $361,700
TOTAL EQUITY $541,700
LIABILITIES
<u>Non Current Liabilities</u>
Notes payable (due in two years) $30,000
Total Non - Current Liabilities $30,000
<u>Current Liabilities</u>
Accounts payable $19,000
Salaries payable $3,800
Interest payable $1,500
Total Current Liabilities $24,300
TOTAL LIABILITIES $54,300
TOTAL EQUITY AND LIABILITIES $596,000
Explanation:
A Balance Sheet show the Assets, Liabilities and Equity Balances as at the Reporting date
Retained Earnings Balance = Opening Balance + Profit for the year - Dividends.
where,
Profit for the Year = Sales - Expenses
= $470,000 - ($78,000 + $18,000 + $33,000 + $2,000 + $42,000)
= $297,000
therefore,
Retained Earnings Balance = $94,700 + $297,000 - 30,000 = $361,700
