The bookkeeper for Geronimo Company has prepared the following balance sheet as of July 31, 2014. GERONIMO COMPANY BALANCE SHEET AS OF JULY 31, 2014 Cash $ 71,680 Notes and accounts payable $ 46,510 Accounts receivable (net) 43,010 Long-term liabilities 77,680 Inventory 62,680 Stockholders equity 158,180 Equipment (net) 84,000 $282,370 Patents 21,000 $282,370 The following additional information is provided. 1. Cash includes $1,200 in a petty cash fund and $15,160 in a bond sinking fund. 2. The net accounts receivable balance is comprised of the following two items: (a) accounts receivable $46,510 and (b) allowance for doubtful accounts $3,500. 3. Inventory costing $5,570 was shipped out on consignment on July 31, 2014. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,570 were recognized on these consigned goods. 4. Equipment had a cost of $114,510 and an accumulated depreciation balance of $30,510. 5. Income taxes payable of $9,320 were accrued on July 31. Geronimo 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, 2014, from the available information, adjusting the account balances using the additional information. (List Current Assets in order of liquidity)

============= Exercise 2

Early in January 2015, Hopkins Company is preparing for a meeting with its bankers to discuss a loan request. Its bookkeeper provided the following accounts and balances at December 31, 2014. Debit Credit Cash $ 75,000 Accounts Receivable (net) 38,500 Inventory 65,300 Equipment (net) 84,000 Patents 15,000 Notes and Accounts Payable $ 52,000 Notes Payable (due 2016) 75,000 Common Stock 100,000 Retained Earnings 50,800 $ 277,800 $ 277,800 Except for the following items, Hopkins has recorded all adjustments in its accounts. 1. Cash includes $500 petty cash and $15,000 in a bond sinking fund. 2. Net accounts receivable is comprised of $52,000 in accounts receivable and $13,500 in allowance for doubtful accounts. 3. Equipment had a cost of $112,000 and accumulated depreciation of $28,000. 4. On January 8, 2015, one of Hopkins customers declared bankruptcy. At December 31, 2014, this customer owed Hopkins $9,000. Prepare a corrected December 31, 2014, balance sheet for Hopkins Company. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Buildings and Equipment.) Hopkins Company Balance Sheet December 31, 2014