Concept explainers
A balance sheet is a financial statement that reports a company’s resources (assets) and claims of creditors (liabilities) and owner’s equity (owner’s equity’) over those resources, on a specific date. The resources of the company are assets which include money contributed by owner’s equity and creditors. Hence, the main elements of the balance sheet are assets, liabilities, and owner’s equity. The balance of the assets account must be equal to that of the liabilities and the owner’s equity account.
To write: A memorandum to Person D explaining the errors in the A Company’s balance sheet, and the correct presentation for the balance sheet.
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Chapter 4 Solutions
Bundle: Financial & Managerial Accounting, Loose-leaf Version, 14th + Working Papers For Warren/reeve/duchac's Corporate Financial Accounting, 14th + ... Financial & Managerial Accounting,
- You have been engaged in your second annual examination of the financial statements of S Co. The following data were provided to you by the company accountant: Cash Receipts: Collection on sale on account Cash sales 740,000 100,000 Proceeds of a note payable dated October 1, 2019 and due October 1, 2021, discounted at 18% 30,000 Cash Disbursements: 400,000 Purchase of land and building on April 1, 2019 Full payment of furniture and fixtures purchased on July 1, 2019 On accounts payable and administrative expenses Selling expenses To 518,000 200,000 Of the sales on account, P10,000 was returned because of poor quality and there was a purchase return of P8,000. The following data are also available: December 31, 2018 Accounts Receivable Merchandise inventory Accounts payable Accrued rent expenses December 31, 2019 200,000 220,000 180,000 40,000 150,000 190,000 230,000 40,000 Of the total purchase price of the Land and Building, 40% is allocated to the land. Annual depreciation is 5% on…arrow_forwardYou are the accountant for Kamal Fabricating, Inc. and you oversee the preparation of financial statements for the year just ended 6/30/2020. You have the following information from the company’s general ledger and other financial reports (all balances are end-of-year except for those noted otherwise): Cash $9,000 Common stock 8,000 Accounts receivable 7,000 Accounts payable 2,000 Cash dividends declared for the year 2,000 Additional paid-in capital 6,000 Prepaid insurance 5,000 Prior period adjustment, net of income taxes (2,000) Unearned revenue 4,000 Retained earnings, beginning of the year 6,000 Net income for the year 9,000 Prepare the company’s Statement of Retained Earnings. Kamal Fabricating, Inc. Statement of Retained Earnings Year Ended June 30, 2020 $fill in the blank 2 fill in the blank 4 $fill in the blank 6 fill in the blank 8 $fill in the blank 9 fill in the blank 11 $fill in the blank 13arrow_forwardPresented below are the ending balances of accounts for the Kansas Instruments Corporation at December 31, 2021. Account Title Debits Credits Cash $ 31,000 Accounts receivable 152,000 Raw materials 35,000 Notes receivable 111,000 Interest receivable 14,000 Interest payable $ 16,000 Investment in debt securities 43,000 Land 61,000 Buildings 1,520,000 Accumulated depreciation—buildings 631,000 Work in process 53,000 Finished goods 100,000 Equipment 322,000 Accumulated depreciation—equipment 141,000 Patent (net) 131,000 Prepaid rent (for the next two years) 71,000 Deferred revenue 47,000 Accounts payable 191,000 Notes payable 510,000 Restricted cash (for payment of notes payable) 91,000 Allowance for uncollectible accounts 24,000 Sales…arrow_forward
- The condensed balance sheet and income statement for Marjoram Company are presented below. MARJORAM COMPANY Balance Sheet December 31, 2024 Cash $ 19,000 Notes receivable (due August 15, 2025) 35,000 Accounts receivable (net) 48,400 Inventory 70,600 Property, plant, and equipment (net) 250,000 Intangible assets 12,400 Total assets $ 435,400 Current liabilities $ 108,400 Bonds payable (11%) (long-term) 100,000 Common stock 70,000 Retained earnings 157,000 Total liabilities and equity $ 435,400 MARJORAM COMPANY Income Statement For the Year ended December 31, 2024 Sales $ 704,000 Cost of goods sold 422,400 Gross profit $ 281,600 Operating expenses 166,200 Operating income $ 115,400 Interest expense 11,000 Income before income tax $ 104,400 Income tax expense 31,320 Net income $ 73,080 Required: Compute the acid-test ratio for Marjoram Company. Note: Round your answer to 2 decimal places.arrow_forwardThe condensed balance sheet and income statement for Marjoram Company are presented below. MARJORAM COMPANY Balance Sheet December 31, 2024 Cash $ 19,000 Notes receivable (due August 15, 2025) 35,000 Accounts receivable (net) 48,400 Inventory 70,600 Property, plant, and equipment (net) 250,000 Intangible assets 12,400 Total assets $ 435,400 Current liabilities $ 108,400 Bonds payable (11%) (long-term) 100,000 Common stock 70,000 Retained earnings 157,000 Total liabilities and equity $ 435,400 MARJORAM COMPANY Income Statement For the Year ended December 31, 2024 Sales $ 704,000 Cost of goods sold 422,400 Gross profit $ 281,600 Operating expenses 166,200 Operating income $ 115,400 Interest expense 11,000 Income before income tax $ 104,400 Income tax expense 31,320 Net income $ 73,080 Required: Compute the current ratio for Marjoram Company. Note: Round your answer to 2 decimal places.arrow_forwardYou are the accountant for Kamal Fabricating, Inc. and you oversee the preparation of financial statements for the year just ended 6/30/2020. You have the following information from the company’s general ledger and other financial reports (all balances are end-of-year except for those noted otherwise): Cash $12,000 Common stock 8,000 Accounts receivable 7,000 Accounts payable 2,000 Cash dividends declared for the year 1,000 Additional paid-in capital 4,000 Prepaid insurance 5,000 Prior period adjustment, net of income taxes (2,000) Unearned revenue 4,000 Retained earnings, beginning of the year 6,000 Net income for the year 9,000 Prepare the company’s Statement of Retained Earnings. Kamal Fabricating, Inc. Statement of Retained Earnings Year Ended June 30, 2020 $ $ $arrow_forward
- You are the accountant for Kamal Fabricating, Inc. and you oversee the preparation of financial statements for the year just ended 6/30/2020. You have the following information from the company’s general ledger and other financial reports (all balances are end-of-year except for those noted otherwise): Cash $11,000 Common stock 8,000 Accounts receivable 7,000 Accounts payable 2,000 Cash dividends declared for the year 2,000 Additional paid-in capital 5,000 Prepaid insurance 5,000 Prior period adjustment, net of income taxes (2,000) Unearned revenue 4,000 Retained earnings, beginning of the year 7,000 Net income for the year 9,000 Prepare the company’s Statement of Retained Earnings. Kamal Fabricating, Inc.Statement of Retained EarningsYear Ended June 30, 2020 $Retained earnings, July 1, 2019 Prior period adjustment, net of income taxes $Adjusted retained earnings, July 1, 2019 Net income $fill in the blank 9 Cash…arrow_forwardYou are the accountant for Kamal Fabricating, Inc. and you oversee the preparation of financial statements for the year just ended 6/30/2020. You have the following information from the company's general ledger and other financial reports (all balances are end-of-year except for those noted otherwise): Cash $9,000 Common stock 5,000 Accounts receivable 7,000 Accounts payable 2,000 Cash dividends declared for the year 2,000 Additional paid-in capital 4,000 Prepaid insurance 5,000 Prior period adjustment, net of income taxes (2,000) Unearned revenue 4,000 Retained earnings, beginning of the year 6,000 Net income for the year 9,000 Prepare the company's Statement of Retained Earnings. Kamal Fabricating, Inc. Statement of Retained Earnings Year Ended June 30, 2020 Accounts payable Adjusted retained earnings, July 1, 2020 Cash Retained earnings, July 1, 2020 Retained earnings, June 30, 2020arrow_forwardPresented below are the ending balances of accounts for the Kansas Instruments Corporation at December 31, 2024. Account Title Debits Credits Cash $ 38,000 Accounts receivable 166,000 Raw materials 42,000 Notes receivable 118,000 Interest receivable 21,000 Interest payable $ 23,000 Investment in debt securities 50,000 Land 68,000 Buildings 1,660,000 Accumulated depreciation—buildings 638,000 Work in process 60,000 Finished goods 107,000 Equipment 336,000 Accumulated depreciation—equipment 148,000 Patent (net) 138,000 Prepaid rent (for the next two years) 78,000 Deferred revenue 54,000 Accounts payable 198,000 Notes payable 580,000 Restricted cash (for payment of notes payable) 98,000 Allowance for uncollectible accounts 31,000 Sales revenue 1,160,000 Cost of goods sold 468,000 Rent expense 46,000 Additional Information: The notes receivable, along with any interest receivable, are…arrow_forward
- Given the ledger accounts of Bastoni Company as of January 31, 2020: Cash $40,500 Accounts Payable $11,000 Supplies 5,200 Rent Expense 4,100 Share Capital-Ordinary 33,200 Accounts 8,700 Receivable Notes Payable 3,500 Service Revenue 10,800 Required: Compute the total of the debit side of the trial balance. (show your computation). 1. Compute the total of the credit side of the trial balance. (show your computation). 2.arrow_forwardAccountants for Putterham, Inc. have assembled the following data for the year ended December 31, 2018: 2018 2017 Current Assets: Cash $ 99,400 $ 25,000 Accounts Receivable 64,100 69,700 Merchandise Inventory 83,000 75,000 Current Liabilities: Accounts Payable 57,600 55,200 Income Tax Payable 14,800 16,800 Transaction Data for 2018: Issuance of common stock for cash $ 38,000 Payment of notes payable $ 46,100 Depreciation expense 24,000 Payment of cash dividends 50,000 Purchase of equipment with cash 74,000 Issuance of notes payable to borrow cash 62,000 Acquisition of land by issuing long-term notes payable 119,000 Gain on sale of building 4,500 Book value of building sold 54,000 Net income 68,500 Prepare Putterham’s statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and…arrow_forwardAccountants for Johnson, Inc. have assembled the following data for the year ended December 31, 2018: 2018 2017 Current Assets Cash $124,700 $26,000 Accounts Receivable 64,500 69,400 Merchandise Inventory 82,000 79,000 Current Liabilities Accounts Payable 57,700 55,500 Income Tax Payable 14,300 17,100 Transaction Data for 2018: Issuance of common stock for cash $43,000 Payment of notes payable $44,100 Depreciation expense 26,000 Payment of cash dividends 51,000 Purchase of equipment with cash 69,000 Issuance of notes payable to borrow cash 66,000 Acquisition of land by issuing long-term notes payable 115,000 Gain on sale of building 6,500 Book value of building sold 56,000 Net income 70,500 Prepare Johnson's statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and financing activities.arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage Learning
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337788281/9781337788281_smallCoverImage.jpg)