Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You and your friend Sha from ACC100 have been studying for the final exam. Sha is very uncertain about the structure of the balance sheet

You and your friend Sha from ACC100 have been studying for the final exam. Sha is very uncertain about the structure of the balance sheet and shows you a practice balance sheet, provided below. Sha could not get the balance sheet to balance. You are told that the retained earnings amount was changed to make the assets equal the liabilities plus equity BUT you both know the retained earnings number is WRONG! You see right away that there are several errors on the statement. Because you are good friends, you decide to produce for Sha a balance sheet in good form using the correct format AND with the correct retained earnings amount

Balance Sheet Year ending December 31, 2021 ASSETS Cash 6,520 Office supplies 1,045 Prepaid insurance 800 Inventory 2,750 Accounts receivable 3,525 Prepaid rent 650 Deferred revenue 1,280 Equipment 65,350 TOTAL ASSETS 81,920

LIABILITIES AND EQUITY Interest payable 1,250 Salaries payable 2,500 Accumulated depreciation 12,570 Note payable (due in 2022) 18,000 Accounts payable 1,455 Income tax payable 950 Dividends (3,000) Retained earnings (INCORRECT!) 28,655 Profit 7,540 Owners capital 12,000 TOTAL LIABILITIES AND EQUITY 81,920

5. What is the correct amount of total liabilities?

6. What is the correct amount of long-lived assets?

7. What is the correct amount of total equity?

8. What is the correct amount of long-term liabilities?

9. What is the correct amount of total assets?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Frank Woods Business Accounting Volume 1

Authors: Alan Sangster, Frank Wood

13th Edition

1292084669, 9781292084664

More Books

Students also viewed these Accounting questions

Question

=+2. What do they like better about its competition?

Answered: 1 week ago

Question

=+a. What kind of personality does the brand have?

Answered: 1 week ago