Use the following information for Quick Studies below. $($Static$)$

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$[$The following information applies to the questions displayed below.$]$

The following is the adjusted trial balance of Sierra Company.

Sierra Company

Adjusted Trial Balance

December $31$

Account Title Debit Credit

Cash $ $5,000$

Prepaid insurance $500$

Notes receivable $($due in $5$ years$)4,000$

Buildings $20,000$

Accumulated depreciation$$Buildings $ $12,000$

Accounts payable $2,500$

Notes payable $($due in $3$ years$)3,000$

Common stock $6,000$

Retained earnings $4,500$

Dividends $1,000$

Consulting revenue $9,500$

Wages expense $3,500$

Depreciation expense$$Buildings $2,000$

Insurance expense $1,500$

Totals $ $37,500$ $ $37,500$

QS $3-30($Static$)$ Preparing an income statement & statement of retained earnings LO C$2$

$(1)$ Prepare an income statement for the year ended December $31.$

$(2)$ Prepare a statement of retained earnings for the year ended December $31.$ The Retained Earnings account balance was $$4,500$ on December $31$ of the prior year.