Answer and Explanation:
The preparation of the classified balance sheet is presented below:
Blue Devils Corporation
Balance Sheet
Dec 31, 2021
Assets Amount ($) Liabilities and shareholder equity Amount ($)
Current assets: Current liabilities
cash $3,800 Accounts payable $24,800
Accounts receivable $7,800 Salaries payable $14,800
Supplies $17,800
Total current assets $29,400 Total current liabilities $39,600
Long-term assets Stockholders equity
Equipment $108,000 Common stock $48,000
Accumulated depreciation -39,000 Retained earnings $10,800
Total assets $98,400 Total liabilities and stockholders equity $98,400
We find the retained earning balance by applying the accounting equation which is shown below:
Assets = Liabilities + common stock + retained earnings
$98,400 = $39,600 + $48,000 + retained earning
So, the retained earning is $10,800
