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-   -   Classified balance sheet (https://www.askmehelpdesk.com/showthread.php?t=91057)

  • May 9, 2007, 09:56 PM
    mcaldwell
    Classified balance sheet
    When preparing a classified balance sheet, do you include the net income from the income statement?
  • May 9, 2007, 10:32 PM
    mcaldwell
    Classified balance sheet
    I am having problems with this question.
    Megan Co. Dec.31, 2005
    Building $105,800
    A/R 12,600
    Prepaid insurance 4680
    Cash 20,840
    Equip 82,400
    Land 61,200
    Insurance exp 780
    Depreciation exp 6300
    Interest exp 2600
    Common stock 66,000
    Retained earnings (jan. 1, 2005) 40,000
    Accumulated depreciation-building 45,600
    A/P 11,500
    Mortgage payable 93,600
    Accumulated depreciation-equipment 18,720
    Interest payable 3600
    Bowling revenues 18,180

    Assume that $13,600 of the mortgage payable will be paid in 2006. From the income statement I get a balance of $8500. Am I suppose to add this to the classified balance sheet? If so, do I put it as retained earnings or net income?
    Thanks in advance.
  • May 10, 2007, 10:04 AM
    CaptainForest
    Quote:

    Originally Posted by mcaldwell
    when preparing a classified balance sheet, do you include the net income from the income statement?

    Yes and No.

    Net Income (Revenue, Expenses, etc.) will be closed into Retained Earnings.

    So while you will never see a “Net Income” account on the balance sheet, the amount will be reflected on the balance sheet under the “Retained Earnings” account.

    As for your second question, if you get a net income of 8,500, that is added to retained earnings.
  • Sep 13, 2007, 03:16 PM
    johnskay
    Wow. I have such a similar problem that I am doing.
    When doing the interest, insurance and deprec. Expenses as well as the bowling revenue.. where did you include these in the classified balance sheet?
  • Oct 17, 2010, 02:30 PM
    tsitakis
    Prepare a classified balance sheet, assuming that $13,600 of the mortgage payable will be paid next year
  • Oct 18, 2010, 08:20 AM
    pready

    Why are you adding to an old thread. You should start your own thread.

    A mortgage payable that is to be paid within one year will be listed in the current liabilities section of a classified balance sheet.

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