Sales revenues (from general store) 25,000 Notes payable 50,000
Accounts payable 13,000 Operating expenses 133,000
Cash 13,500 Supplies 2,500
Equipment 108,000 Common stock 40,000
Retained earnings (1/1/2022) 5,000
Instructions
(a) Determine net income from Sleep Cheap for 2022.
(b) Prepare a retained earnings statement and a balance sheet for Sleep Cheap as of December 31, 2022.
Ans: N/A, LO: 3, Bloom: AP, Difficulty: Medium, Min: 10, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FC: Reporting, AICPA PC: Problem Solving, IMA: Reporting
Solution 212
(a) Service revenue $132,000
Sales revenue 25,000
Total revenue 157,000
Expenses 133,000
Net income $ 24,000
(b) SLEEP CHEAP
Retained Earnings Statement
For the Year Ended December 31, 2022
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Retained earnings, January 1 $ 5,000