When preparing a classified balance sheet, do you include the net income from the income statement?
When preparing a classified balance sheet, do you include the net income from the income statement?
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.
Yes and No.Quote:
Originally Posted by mcaldwell
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.
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?
Prepare a classified balance sheet, assuming that $13,600 of the mortgage payable will be paid next year
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.
All times are GMT -7. The time now is 03:27 AM. |