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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:

  1. 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.
  2. 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.
  3. The prepaid expenses represent amounts paid for advertising services for the next eight months.
  4. The unearned revenue represents a service contract for which Barnstable has committed to providing services evenly over the next two years.
  5. 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

  1. Prepare the Current Assets section to be reported on Barnstable Companys December 31, 2021 balance sheet.

  1. Prepare the Property, Plant & Equipment section to be reported on Barnstable Companys December 31, 2021 balance sheet.

  1. Prepare the Current Liabilities section to be reported on Barnstable Companys December 31, 2021 balance sheet.

  1. Calculate the amount to be reported for Total Liabilities and Stockholders Equity on Barnstable Companys December 31, 2021 balance sheet.

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