Question

The following account balances appear in the 2021 adjusted trial balance of Blue Devils Corporation:

Cash, $3,800;
Accounts Receivable, $7,800;
Supplies, $17,800;
Equipment, $108,000;
Accumulated Depreciation, $39,000;
Accounts Payable, $24,800;
Salaries Payable, $14,800;
Common Stock, $48,000; and Retained Earnings,.
Required:
1. Prepare the December 31, 2021, classified balance sheet including the correct balance for retained earnings. (Amounts to be deducted should be entered with minus sign.)

Answer 1

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