Question

Wolfpack Construction has the following account balances at the end of the year. Accounts Balances Equipment $ 21,000 Accounts payable 2,000 Salaries expense 28,000 Common stock 10,000 Land 13,000 Notes payable 15,000 Service revenue 34,000 Cash 5,000 Retained earnings ? Required: Use only the appropriate accounts to prepare a balance sheet

Answer 1

To set up a T-account balance sheet for the bank, list the assets on the left side and liabilities and net worth on the right side. The bank's net worth is calculated by subtracting liabilities from assets.

Step-by-step explanation:

To set up a T-account balance sheet for the bank, we have to list the bank's assets on the left side and its liabilities and net worth on the right side.

Assets:
Reserves: $50
Government bonds: $70
Loans: $500

Liabilities:
Deposits: $400

Net Worth:
Net Worth = Assets - Liabilities
Net Worth = ($50 + $70 + $500) - $400
Net Worth = $120

Answer 2

The Retained Earnings of Wolfpack Construction as of the end of the year will be $12,000.

Step-by-step explanation:

Wolfpack Construction

Balance Sheets

As of End of Year

Assets $

Current Assets:

Cash 5,000

Fixed Assets:

Land 13,000

Equipment 21,000

Total Assets 39,000

Liabilities and Stockholders’ Equity

Current Liabilities:

Accounts payable 2,000

Long Term Liabilities:

Notes payable 15,000

Equity:

Common stock 10,000

Retained earnings 12,000

Total Liabilities and Stockholder's Equity 39,000