How do you construct balance sheet?

Balance Sheet Problem?

• The problem is too construct a balance sheet with the following information: Inventory: $6500 Common Stock: $45000 Cash: $16550 Operating Expenses: $1350 Short-Term Notes Payable: $600 Interest Expense: $900 Depreciation Expense: $500 Net Sales: $12800 Accounts Receivable: $9600 Accounts Payable: $4800 Long-Term Debt: $55000 Cost of Goods Sold: $5750 Buildings and Equipment: $122000 Accumulated Depreciation: $34000 Taxes: $1440 General and Administrative Expense: $850 Putting together the balance sheet wasn't a problem, but asset don't equal liabilities + equity. I think I'm "missing" retained earnings?

• Answer:

  I'm guessing you left out the net income that is added to retained earnings. Net Sales: $12800 - Cost of Goods Sold: $5750 - Operating Expenses: $1350 - Interest Expense: $900 - Depreciation Expense: $500 - Taxes: $1440 - General and Administrative Expense: $850 = Net Income 2,010 Assets Inventory: $6500 Cash: $16550 Accounts Receivable: $9600 Buildings and Equipment: $122000 - Accumulated Depreciation: $34000 Total Assets 120,650 Liabilities Short-Term Notes Payable: $600 Accounts Payable: $4800 Long-Term Debt: $55000 Total Liabilities 60,400 Equity Common Stock: $45000 Retained Earnings 2,010 Total Equity 47,010 Total liabilities plus equity 107,410 120,650 - 107,410 = 13,240 difference Since the amounts should equal, it looks like you're missing beginning retained earnings balance of 13,240.