Given the following account information for Leong Corporation All accounts have

Question

Given the following account information for Leong Corporation All accounts have normal balances. Equipment 60,000 Interest Expense 2,400 Interest Payable 600 Retained Earnings? Dividends 50,400 Land 137,320 Accounts Receivable 102,000 Bonds Payable 78,000 Notes Payable (due in 6 months) 29,400 Common Stock 70,000 Accumulated Depreciation Equip. 10,000 Prepaid Advertising 5,000 Service Revenue 341,400 Buildings 80,400 Supplies 1,860 Income Taxes Payable 3,000 Utilities Expense 1,320 Advertising Expense 1,560 Salaries and Wages Expense 53,040 Salaries and Wages Payable 900 Accumulated Depr. Bld 15,000 Cash 45,000 Depreciation Expense 8,000 a. Prepared a classified balance sheet.

Explanation / Answer

STATEMENT OF INCOME Amount $ Service revenue 341,400 Less: Operating expense Interest expense 2400 Utilities expense 1320 Advertising expense 1560 Salaries and wages expense 53040 Depreciation expense 8000 66320 Net income before tax 275080 STATEMENT OF RETAINED EARNINGS Amount $ Beginning balance 0 Less: Dividend 50,400 Add: Net income earned 275,080 Ending balance 224,680 BALANCE SHEET Amount $ ASSETS: Current Assets: Cash 45,000 Accounts Receivable 102000 Supplies 1860 Prepaid Advertising 5,000 153,860 Fixed Assets: Land 137,320 Equipment 60,000 Less: Accumualted dep 10,000 50,000 Building 80,400 Accumulated depreciation 15,000 65,400 TOTAL ASSETS 406,580 LIABILITIES: Current Liabilities: Interest payable 600 Income tax payable 3,000 Notes payable 29,400 Salaries payable 900 33,900 Long term notes payable 78,000 Stockholder's equity: Common Equity 70,000 Retained earnings 224,680 294,680 TOTAL LIABILITIES 406,580

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