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The following is the adjusted trial balance of Sierra Company. Account Title Cash Sierra Company Adjusted Trial Balance December 31 Prepaid insurance Notes receivable (due in 5 years) Buildings Accumulated depreciation-Buildings Accounts payable Notes payable (due in 3 years) Common stock Retained earnings Dividends Consulting revenue Wages expense Depreciation expense-Buildings Insurance expense Totals Debit $5,000 500 4,000 20,000 1,000 3,500 2,000 1,500 $37,500 Credit $12,000 2,500 3,000 6,000 4,500 9,500 $37,500 Required: (1) Prepare an income statement for the year ended December 31. (2) Prepare a statement of retained earnings for the year ended December 31. The Retained Earnings account balance was $4,500 on December 31 of the prior year.

The following is the adjusted trial balance of Sierra Company. Account Title Cash Sierra Company Adjusted Trial Balance December 31 Prepaid insurance Notes receivable (due in 5 years) Buildings Accumulated depreciation-Buildings Accounts payable Notes payable (due in 3 years) Common stock Retained earnings Dividends Consulting revenue Wages expense Depreciation expense-Buildings Insurance expense Totals Debit $5,000 500 4,000 20,000 1,000 3,500 2,000 1,500 $37,500 Credit $12,000 2,500 3,000 6,000 4,500 9,500 $37,500 Required: (1) Prepare an income statement for the year ended December 31. (2) Prepare a statement of retained earnings for the year ended December 31. The Retained Earnings account balance was $4,500 on December 31 of the prior year.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following is the adjusted trial balance of Sierra Company. Sierra Company Adjusted Trial Balance December 31 Account Title Cash Prepaid insurance Notes receivable (due in 5 years) Buildings Accumulated depreciation-Buildings Accounts payable Notes payable (due in 3 years) Common stock Retained earnings Dividends Consulting revenue Wages expense Depreciation expense-Buildings Insurance expense Totals Debit $5,000 500 4,000 20,000 1,000 3,500 2,000 1,500 $37,500 Credit $12,000 2,500 3,000 6,000 4,500 9,500 $37,500 Required: (1) Prepare an income statement for the year ended December 31. (2) Prepare a statement of retained earnings for the year ended December 31. The Retained Earnings account balance was $4,500 on December 31 of the prior year.
Transcribed Image Text:The following is the adjusted trial balance of Sierra Company. Sierra Company Adjusted Trial Balance December 31 Account Title Cash Prepaid insurance Notes receivable (due in 5 years) Buildings Accumulated depreciation-Buildings Accounts payable Notes payable (due in 3 years) Common stock Retained earnings Dividends Consulting revenue Wages expense Depreciation expense-Buildings Insurance expense Totals Debit $5,000 500 4,000 20,000 1,000 3,500 2,000 1,500 $37,500 Credit $12,000 2,500 3,000 6,000 4,500 9,500 $37,500 Required: (1) Prepare an income statement for the year ended December 31. (2) Prepare a statement of retained earnings for the year ended December 31. The Retained Earnings account balance was $4,500 on December 31 of the prior year.
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