Question
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Sep 21, 2007, 09:16 AM
| | New Member  | | Join Date: Sep 2007
Posts: 3
| | | Creating balance sheet from trial balance
I am having issues getting a balance sheet to come out right from the given data from a trial balance. Can anyone help me out with this? I have included a picture of what I am working on.....
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Answers
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Sep 21, 2007, 11:39 AM
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#2
| | | Finance & Accounting Expert
Join Date: Nov 2005 Location: Canada
Posts: 3,673
| What do you think the answer is?
Please make an attempt first. |
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Sep 21, 2007, 11:43 AM
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#3
| | New Member
Join Date: Sep 2007
Posts: 3
| Quote: | Originally Posted by CaptainForest What do you think the answer is?
Please make an attempt first. |
Here is my attempt.......... | |
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Sep 21, 2007, 07:11 PM
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#4
| | | Finance & Accounting Expert
Join Date: Nov 2005 Location: Canada
Posts: 3,673
| You forgot to add Dividends Payable of 136,000 under short term liabilities
You forgot to add the Net Income which is calculated as:
Revenue:
Sales 9,100,000
Investment Revenue 63,000
Gain 90,000
Expenses:
COGS 4,800,000
Selling Expense 2,000,000
Admin Expense 900,000
Interest Expense 211,000
Net Income = 1,342,000
However…..that Net Income number is not complete as there is no depreciation expense for equipment or building. What more information was given? | |
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Sep 21, 2007, 09:27 PM
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#5
| | New Member
Join Date: Sep 2007
Posts: 3
| Quote: | Originally Posted by CaptainForest You forgot to add Dividends Payable of 136,000 under short term liabilities
You forgot to add the Net Income which is calculated as:
Revenue:
Sales 9,100,000
Investment Revenue 63,000
Gain 90,000
Expenses:
COGS 4,800,000
Selling Expense 2,000,000
Admin Expense 900,000
Interest Expense 211,000
Net Income = 1,342,000
However…..that Net Income number is not complete as there is no depreciation expense for equipment or building. What more information was given? |
The image of the problem is captured from my assignment. That is all the info that was given...... | |
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May 4, 2008, 08:16 AM
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#6
| | New Member
Join Date: May 2008
Posts: 1
| Why would the NET INCOME be on the balance sheet? This is not the income statement. | |
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May 4, 2008, 10:34 PM
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#7
| | | Accounting Expert
Join Date: Feb 2008
Posts: 754
| Quote: | Originally Posted by akreigh Why would the NET INCOME be on the balance sheet? This is not the income statement. |
The net income is not directly on a balance sheet, but it increases retained earnings, which is on the balance sheet. The retained earnings is not updated yet in this problem, but rather is still back at a beginning balance. We can tell this because all of the revenue and expense accounts are still listed in the trial balance, meaning retained earnings has not yet been updated to year-end. | |
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