How do I create and start a balance sheet for this data? ### Red Inc. Trial Balance**Date:** December 31, 2022| **Account** | **Debit** | **Credit** ||-----------------------------------------------------|------------|------------|| Accounts payable | | $180,000 || Accounts receivable | $600,000 | || Other Accrued liabilities | | $100,000 || Accumulated depreciation | | $300,000 || Additional paid-in capital | | $260,000 || Allowance for doubtful accounts | | $100,000 || Cash | $500,000 | || Common stock, $10 par | | $320,000 || Long-term bonds payable | | $200,000 || Inventories | $850,000 | || Short-term Investment securities (reported at market; cost, $142,000) | $150,000 | || Note payable, 5-year | | $600,000 || Property and equipment | $820,000 | || Retained earnings | | $890,000 || Revenue | | $500,000 || Cost of Goods Sold | $350,000 | || Salaries expense | $80,000 | || Rent expense | $32,000 | || Advertising expense | $8,000 | || Dividends | $60,000 | |**Totals** | $3,450,000 | $3,450,000 |### ExplanationThis trial balance for Red Inc. provides a snapshot of the company's financial position as of December 31, 2022. It lists all the accounts with their respective debit and credit balances, ensuring that the total debits equal the total credits, which is a fundamental principle of accounting.- **Debits and Credits:** - The **debit column** includes assets such as accounts receivable, cash, inventories, and expenses like salaries, rent, and advertising. - The **credit column** includes liabilities such as accounts payable and note payable, as well as equity accounts like common stock and retained earnings.The balance confirms the accounting equation: **Assets = Liabilities + Equity.

Answered: Red Inc. Trial Balance December 31,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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How do I create and start a balance sheet for this data?

### Red Inc. Trial Balance

**Date:** December 31, 2022

| **Account** | **Debit** | **Credit** |
|-----------------------------------------------------|------------|------------|
| Accounts payable | | $180,000 |
| Accounts receivable | $600,000 | |
| Other Accrued liabilities | | $100,000 |
| Accumulated depreciation | | $300,000 |
| Additional paid-in capital | | $260,000 |
| Allowance for doubtful accounts | | $100,000 |
| Cash | $500,000 | |
| Common stock, $10 par | | $320,000 |
| Long-term bonds payable | | $200,000 |
| Inventories | $850,000 | |
| Short-term Investment securities (reported at market; cost, $142,000) | $150,000 | |
| Note payable, 5-year | | $600,000 |
| Property and equipment | $820,000 | |
| Retained earnings | | $890,000 |
| Revenue | | $500,000 |
| Cost of Goods Sold | $350,000 | |
| Salaries expense | $80,000 | |
| Rent expense | $32,000 | |
| Advertising expense | $8,000 | |
| Dividends | $60,000 | |

**Totals** | $3,450,000 | $3,450,000 |

### Explanation

This trial balance for Red Inc. provides a snapshot of the company's financial position as of December 31, 2022. It lists all the accounts with their respective debit and credit balances, ensuring that the total debits equal the total credits, which is a fundamental principle of accounting.

- **Debits and Credits:**
- The **debit column** includes assets such as accounts receivable, cash, inventories, and expenses like salaries, rent, and advertising.
- The **credit column** includes liabilities such as accounts payable and note payable, as well as equity accounts like common stock and retained earnings.

The balance confirms the accounting equation: **Assets = Liabilities + Equity.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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The balance sheet is a summary of permanent accounts prepared at the end of the accounting period. It is an essential part of financial statements. The balance sheet includes categories of current assets, long-term assets, current liabilities, long-term liabilities, and shareholders' equity.

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