Answer:
Balance sheet
as December 31th, 2018
Assets
Current Assets
Cash 12,077
Accounts receivable 12,852
Prepaid insurance 3,264
Total current 28,193
Non current Assets
Land 62,424
Buildings 107,916
Acc dep-equipment (19,094)
Equipment 84,048
Acc dep-buildings (46,512)
Total non current 188,782
Total Assets 216,975
Liabilities
Current Liabilities
Accounts payable 9,690
Notes payable 13,872
Interest payable 3,672
Total current: 27,234
Non current liabilities
Note Payable 81,600
Total Liabilities 108,834
Equity
Common stock 61,200
Retained earnings 46,941
Total Equity 108,141
Total Liablities and stockholders equity 216,975
Explanation:
We have to determinate net icnoem and add it to the retained earnings.
Net income:
Service revenue 14,994
Insurance expense (796)
Depreciation expense (5,406)
Interest expense (2,652)
Net income 6, 140
Retained earnings (January 1, 2017) 40,801
+ net income 6,140
Retained earnings (Dec 31th, 2017) 46,941
Then we post the assets considerending liquidity.
We should make sure that liabilities and equity matches assets to know the accounting equation:
Assets = liabilities + equity is correct.
