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omadri7231 · Sep 21, 2007, 10:16 AM

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...

CaptainForest · Sep 21, 2007, 12:39 PM

What do you think the answer is?

Please make an attempt first.

omadri7231 · Sep 21, 2007, 12:43 PM

Originally Posted by CaptainForest

What do you think the answer is?

Please make an attempt first.

Here is my attempt...

CaptainForest · Sep 21, 2007, 08:11 PM

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?

omadri7231 · Sep 21, 2007, 10:27 PM

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...

akreigh · May 4, 2008, 09:16 AM

Why would the NET INCOME be on the balance sheet? This is not the income statement.

morgaine300 · May 4, 2008, 11:34 PM

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.

jimmy20 · Jun 17, 2008, 08:56 AM

Originally Posted by morgaine300

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.

No, question was to make a B/S, and even told to ignore Income tax. Also trial balance
Does not include Depreciation Exp. So you can't get exact net income which goes to retained erning ending balance for this year balance sheet. So I would use provided R/E amount for this year B/S. by the way your attempt has many errors.

morgaine300 · Jun 17, 2008, 11:00 PM

Jimmy, you're quoting me -- but I'm not the one who did all this, only explained net income. And the original question is from 2007.

BrittyS · Aug 23, 2008, 04:35 PM

Yes, the R/E do need to be adjusted. I was of by 1,332,000 and this question helped me very much! There is one number wrong in the previous answer about net income and it is the gains is only 80,000. Hope this helps, but I spent many hours on it... please read chapter 5 and the LO2 before just copying this answer. I finally got all the assets to match the above spreadsheet, then used this question to get my SE & L to match.

shiningkitten · Oct 7, 2009, 06:51 AM

OMG, thank you so much!! I spent hours trying to figure out how to connect net income to the balance sheet and it is so easy!