Wolfpack Construction has the following account balances at the end of the year. Accounts Balances Equipment $ 18,500 Accounts payable 1,500 Salaries expense 25,500 Common stock 10,000 Land 10,500 Notes payable 12,500 Service revenue 31,500 Cash 4,500 Retained earnings ? Required: Use only the appropriate accounts to prepare a balance sheet.

                                Wolfpack Construction

                             Balance sheet for the year ended

                                      Amount in $                       Amount in $

Assets

Current assets

Cash                                  4,500

Non current assets

Equipment                        18,500                                            

Land                                 10,500                                            

Total Assets                                                                33,500

Liabilities

Current liabilities

Accounts payable              1,500

Non-current liabilities  

Notes payable                   12,500                                              

Total liabilities                                                              14,000

Equity

Common stock                   10,000

Retained earnings              9,500                                            

Total Equity                                                                    19,500

Total Liabilities and Equity                                           33,500

Explanation:

The balance sheet shows the assets, liabilities and equity of a business. It defines the accounting equation. Assets include cash, equipment, receivables. Liabilities include notes payable, loans, accrued expense etc.

Assets = Liabilities + Equity

Equity is made up of common stock and retained earnings

Retained earnings?

Equity = $33,500 - $14,000

= $19,500

Retained earnings = $19,500 - $10,000

= $9,500

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