Required information Use the following information for Quick Studies below. (Algo) [The following information applies to the questions displayed below.] The following is the adjusted trial balance of Sierra Company. The Retained Earnings account balance was $25,500 on December 31 of the prior year. Account Title Cash Prepaid insurance Notes receivable (due in 5 years) Buildings Accumulated depreciation-Buildings Accounts payable Notes payable (due in 3 years) Common stock Retained earnings Dividends Consulting revenue Wages expense Depreciation expense-Buildings Insurance expense Totals Debit Credit $ 45,000 2,500 8,000 120,000 $ 32,000 12,500 13,000 15,000 25,500 11,000 109,500 5,500 12,000 3,500 $207,500 $207,500 QS 3-22 (Algo) Preparing financial statements LO P5 Required (1) Prepare an income statement for the year ended December 31. (2) Prepare a statement of retained earnings for the year ended December 31. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the year ended December 31. SIERRA COMPANY Income Statement Revenues: Consulting revenue $ 109,500 0 $ 109,500 Total revenue Expenses: Depreciation expense-Buildings Wages expense Insurance expense > $ 12,000 5,500 3,500 Total expense Net income 21,000 $ 88,500 Required (1) Prepare an income statement for the year ended December 31. (2) Prepare a statement of retained earnings for the year ended December 31. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a statement of retained earnings for the year ended December 31. Owner made no investments during the current period. SIERRA COMPANY Statement of Retained Earnings For Year Ended December 31 Retained earnings, December 31 prior year end $ Add: Net income 25,500 0 88,500 114,000 11,000 Less: Dividends 0 Retained earnings, December 31 current year end $ 103,000