Chapter 21, Problem 1ES

To determine

To calculate: The values of the missing balance sheet of Fawcett’s Plumbing Supplies.

Answer to Problem 1ES

Solution:

The completed balance sheet is as shown below,

Balance sheet
Assets	Amount ($)
Current assets
Cash	1,724
Office supplies	173
Account receivable	9,374
Total current assets	$11,271
Plant and equipment
Equipment	12,187
Total plant and equipment	12,187
Total assets	$23,458
Liabilities
Current liabilities
Account payable	2,174
Wages payable	674
Property and taxes payable	250
Total current liabilities	$3,098
Owner's equity
Capital	20,360
Total liabilities and owner's equity	$23,458

Explanation of Solution

Given Information:

The incomplete balance sheet is given as,

Balance sheet
Assets	Amount ($)
Current assets
Cash
Office supplies
Account receivable
Total current assets
Plant and equipment
Equipment
Total plant and equipment
Total assets
Liabilities
Current liabilities
Account payable
Wages payable
Property and taxes payable
Total current liabilities
Owner's equity
Capital
Total liabilities and owner's equity

Calculation:

Consider the provided incomplete balance sheet,

In order to get the missing figures,

First, add the total current assets and total plant and equipment to get total assets,

$\begin{array}{c}\text{Total current assets}=\$1724+\$173+\$9374\\ =\$11271\end{array}$

Now, add the total current assets and total plant and equipment to get total assets,

$\begin{array}{c}\text{Total assets}=\$11,271+\$12,187\\ =\$23,458\end{array}$

Then, add the current liabilities to get total liabilities,

$\begin{array}{c}\text{Total current liabilities}=\$2174+\$674+\$250\\ =\$3098\end{array}$

Then, total liabilities and capital to match the both sides of the balance sheet.

$\begin{array}{c}\text{Total liabilities and owner's equity}=\$3098+\$20360\\ =\$23458\end{array}$

So, the balance sheet will be like as follows;

Balance sheet
Assets	Amount ($)
Current assets
Cash	1,724
Office supplies	173
Account receivable	9,374
Total current assets	$11,271
Plant and equipment
Equipment	12,187
Total plant and equipment	12,187
Total assets	$23,458
Liabilities
Current liabilities
Account payable	2,174
Wages payable	674
Property and taxes payable	250
Total current liabilities	$3,098
Owner's equity
Capital	20,360
Total liabilities and owner's equity	$23,458