Question

The following data are available for Louis Candies Inc. as of December 31, 2019.

Cash          $ 7,500

Accounts payable 24,000

Accounts receivable 20,000

Capital stock 42,000

Buildings 49,500

Supplies 2,000

Retained earnings      ?

Land 20,000

Required:

1. Prepare a balance sheet for Louis Candies Inc.
2. Determine the amount of retained earnings at December 31, 2019.

Answer 1

a.

Balance Sheet
At December 31,2019
Assets		Liabilities
Cash	$7,500	Accounts payable	$24,000
Supplies	$2,000
Buildings	$49,500	Stockholders' Equity:
Land	$20,000	Capital stock	$20,000
		Retained earnings	$35,000
		Total stockholders' equity	$55,000
Total assets	$79,000	Total liabilities and stockholders' equity	$79,000

b.

Assets:
Cash	$7,500
Supplies	$2,000
Buildings	$49,500
Land	$20,000
Total assets	$79,000
(Less):
Accounts payable	($24,000)
Capital stock	($20,000)
Retained earnings	$35,000