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3 years ago

The accounts in the ledger of Dependable Delivery Service contain the following balances on July 31, 2022.

Business

1 answer:

pishuonlain [190]3 years ago

6 0

Answer:

Dependable Delivery Service

Classified balance sheet as at July 31, 2022

Non Current Assets

Equipment $59,360

Total Non Current Assets $59,360

Current Assets

Accounts Receivable $11,400

Prepaid Insurance $1,800

Cash $15,940

Total Current Assets $29,140

Total Assets $88,500

Equity and Liabilities

Equity

Common Stock $40,000

Retained Earnings $8,750

Total Equity $48,750

Liabilities

Non Current Liabilities

Notes Payable, due 2024 $31,450

Total Non Current Liabilities $31,450

Current Liabilities

Accounts Payable $7,400

Salaries and Wages Payable $900

Total Non-Current Liabilities $8,300

Total Liabilities $39,750

Total Equity and Liabilities $88,500

Explanation:

Its very important to calculate the Retained Earnings Balance at the end of July 2020.

To do this, we need to first calculate the Net Income for the period as follows :

Income Statement for the year ended July 31, 2022

Service Revenue 15,500

Less Expenses :

Maintenance and Repairs Expense 1,200

Utilities Expense 950

Insurance Expense 600

Salaries and Wages Expense 8,400 (11,150)

Net Income/(loss) 4,350

Then, calculate the Retained Earnings Balance as follows :

Retained Earnings Calculation

Beginning Balance 5,200

Add Net Income during the period 4,350

Less Dividends (800)

Ending Balance 8,750

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