Required information [The following information applies to the questions display

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Required information [The following information applies to the questions displayed below. The Sky Blue Corporation has the following adjusted trial balance at December 31. Debit $1,340 3,100 3,400 4,100 17,500 Credit Cash Accounts Receivable Prepaid Insurance Notes Receivable (long-term) Equipment Accumulated Depreciation Accounts Payable Salaries and Wages Payable Income Taxes Payable Deferred Revenue Common Stock Retained Earnings Dividends Sales Revenue Rent Revenue Salaries and Wages Expense Depreciation Expense Utilities Expense Insurance Expense Rent Expense Income Tax Expense 4,800 6,520 1,550 4,000 820 3,500 1,440 410 51,930 410 23,800 2,400 5, 320 2,500 7,100 4,000 Total $74,970 $74,970 1. Prepare a classified balance sheet at December 31. (Amounts to be deducted should be indicated by a minus sign.) SKY BLUE CORPORATION Balance Sheet At December 31 Assets

Explanation / Answer

Sky Blue corporation Balancesheet As on December 31 Assets : Current assets Cash $   1,340 Accounts Receivables $   3,100 Prepaid insurance $   3,400 Total Current assets $   7,840 Notes Receivable $   4,100 Equipments $ 17,500 Less: Accumulated Deprecialtion $   4,800 $ 12,700 Total assets $ 24,640 Liabilities : Current Liabilities Accounts Payable $   6,520 Salaries and Wages Payable $   1,550 Income taxes Payable $   4,000 Deffered revenue $       820 Total Current Liabilities $ 12,890 Stockholder's Equity Common stock $   3,500 Retained Earnings $   8,250 Total Stockholder's Equity $ 11,750 Total Liabilities and Stockholder's Equity $ 24,640 Working Notes: Computation of retained earnings Retained earnings statement For the year ended December 31 Opening balance January 01 $   1,440 Add: Net Income $   7,220 Less: Dividend paid $       410 $   6,810 Closing balance December 31 $   8,250 Computation of Net Income: Revenues Sales Revenue $ 51,930 Rent revenue $       410 Less: Expenses Salaries and Wages expense $ 23,800 Depreciation expense $   2,400 Utilities expense $   5,320 Insurance expense $   2,500 Rent expense $   7,100 Income tax expense $   4,000 Total Expense $ 45,120 Net Income $   7,220

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