Question

The adjusted trial balance for Rowdy Profits Corporation reports that its equipment had cost $240,000. For the current year, the company has recorded $28,800 of depreciation, which brings the total depreciation to date to $144,000.

Balance Sheet Income Statement
Assets Revenues
Liabilities Expenses
Stockholders’ Equity
Required:

Using the headings shown above, indicate the location and amounts that would be used to report the three items on the company’s balance sheet and income statement. (Any deduction should be entered with a minus sign)

Answer 1

Explanation:

The reporting is shown below:

                                        Income statement

Particulars                  Amount                   Particulars                  Amount          

Depreciation

expense                      $28,800

                                            Balance sheet

Liabilities                    Amount        Assets                     Amount

                                                 Equipment                     $240,000

                                                Less: Accumulated

                                               Depreciation                  -$144,000

                                          Net value of an equipment $96,000

Only these items would be displayed on the income statement and the balance sheet