Exercise 5B-6

The bookkeeper for Sarasota Company has prepared the following balance sheet as of July 31, 2017.

SARASOTA COMPANY BALANCE SHEET AS OF JULY 31, 2017
Cash		$ 73,440		Notes and accounts payable		$ 48,440
Accounts receivable (net)		44,940		Long-term liabilities		79,440
Inventory		64,440		Stockholders equity		159,940
Equipment (net)		84,000				$287,820
Patents		21,000
		$287,820

The following additional information is provided.

1.		Cash includes $1,200 in a petty cash fund and $11,820 in a bond sinking fund.
2.		The net accounts receivable balance is comprised of the following two items: (a) accounts receivable $48,440 and (b) allowance for doubtful accounts $3,500.
3.		Inventory costing $5,389 was shipped out on consignment on July 31, 2017. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,389 were recognized on these consigned goods.
4.		Equipment had a cost of $116,440 and an accumulated depreciation balance of $32,440.
5.		Income taxes payable of $6,000 were accrued on July 31. Sarasota Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset against the income taxes payable amount.

Prepare a corrected classified balance sheet as of July 31, 2017, from the available information, adjusting the account balances using the additional information. (List Current Assets in order of liquidity)

Current Assets ash SARASOTA COMPANY Balance Sheet uly 31, 2017 Liabilities and Stockholders' Equity