Principles of Accounting

Principles of Accounting

Financial Accounting – Balance Sheet

 

We’re continuing to analyze the same company as in modules 1 and 2.

Additional information added in module 2:

One client had indicated that they were interested in purchasing $45,500 worth of products. However, the client has not actually committed to the purchase.
The bookkeeper already corrected the sales account. However, the bookkeeper may have made a mistake when computing cost of goods sold. She included total production costs for 2012 and did not adjust ending inventory for the $45,500 worth of units left at the end of the year. The amount of ending inventory was determined using a physical count.
Additional information for module 3:

The company made a secondary offering of stock and raised an additional $225,000.
The company had already paid $22,000 in dividends before deciding on the offering.
The company now has cash to invest in a piece of raw land on which to build in the future. The investment takes place before year end. The cost of the land is $400,000, the downpayment is $20,000 and a note to the bank covers the rest.
Smith Company
31-Dec-12
Trial Balance (accounts in alphabetical order)

 

Debit Credit
Accounts payable 67,000
Accounts receivable 24,500
Cash 30,000
Common stock 10,000
Depreciation expense 24,350
Cost of goods sold 234,000
Equipment (net of depreciation) 316,000
Insurance 1,400
Inventory 25,000
Long-term debt 145,000
Marketing 4,500
Paid-in capital 90,000
Property taxes 8,900
Rent 18,000
Retained earnings ???
Revenues 406,000
Salaries 67,500
Utilities 6,700

Total 760,850 718,000

 

Required

Prepare a balance sheet for the company in good format. Update the balance sheet for the changes to income in module 2 and also consider the effect of paying the dividend. You do not need to include the income statement.

Modular SLP Assignment Expectations

It is important to answer the questions as posed. The document should be two to four pages and written in a clear and concise manner or present tables as required. Support your discussion or tables with references in APA format. You are encouraged to use Excel or other compatible spreadsheet when computations are involved. You can turn in the spreadsheet instead. The content should be equivalent to the page length suggested for a word processing document.

 

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