Question
Problem 2: The Balance Sheet (20 points) The following are the ending balances of accounts at December 31, 2021, for Barnstable Corporation. All accounts have
Problem 2: The Balance Sheet (20 points)
The following are the ending balances of accounts at December 31, 2021, for Barnstable Corporation. All accounts have a natural balance (e.g., cash has a debit balance).
Account Title | Balance |
| ||
Accounts payable | $ | 104,000 |
|
|
Accounts receivable |
| 89,600 |
|
|
Accumulated depreciationbuildings |
| 160,000 |
|
|
Accumulated depreciationequipment |
| 40,000 |
|
|
Allowance for uncollectible accounts |
| 8,000 |
|
|
Buildings |
| 480,000 |
|
|
Cash | 40,000 |
|
| |
Common stock |
| 320,000 |
|
|
Copyright (net) |
| 19,200 |
|
|
Equipment |
| 120,000 |
|
|
Interest payable |
| 16,000 |
|
|
Inventory |
| 129,600 |
|
|
Investment in equity securities |
| 70,400 |
|
|
Land |
| 192,000 |
|
|
Notes payable |
| 400,000 |
|
|
Prepaid expenses |
| 51,200 |
|
|
Retained earnings 12/31/2021 |
| 112,000 |
|
|
Unearned revenue |
| 32,000 |
|
|
Additional Information:
- The $192,000 balance in the land account consists of $160,000 for the cost of land where the plant and office buildings are located. The remaining $32,000 represents the cost of land being held for speculation.
- The $70,400 balance in the investment in equity securities account represents an investment in the common stock of another corporation. Barnstable intends to sell one-quarter of the stock within the next year and keep the remaining three-quarters as a long-term investment.
- The prepaid expenses represent amounts paid for advertising services for the next eight months.
- The unearned revenue represents a service contract for which Barnstable has committed to providing services evenly over the next two years.
- The notes payable account consists of a $160,000 note due in six months and a $240,000 note due in three annual installments of $80,000 each, with the first payment due in August of 2022.
Required
Prepare your answers to the four questions on the next page for Barnstable Company.
SHOW ALL WORK ON THE FOLLOWING PAGE.
PROBLEM 2, continued
- Prepare the Current Assets section to be reported on Barnstable Companys December 31, 2021 balance sheet.
- Prepare the Property, Plant & Equipment section to be reported on Barnstable Companys December 31, 2021 balance sheet.
- Prepare the Current Liabilities section to be reported on Barnstable Companys December 31, 2021 balance sheet.
- Calculate the amount to be reported for Total Liabilities and Stockholders Equity on Barnstable Companys December 31, 2021 balance sheet.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started