Carpet Bazaar is developing its annual financial statements for 2005. The following amounts were correct at December 31. 2005: cash. $35,000; investment in stock of ABC corporation (long term).

S32.000; store equipment. S5 1.000; accounts receivable. $47,500; carpet inventory. $1 18.000; prepaid insurance. $1,300; used store equipment held for disposal. $3,500; accumulated depreciation, store equipment. $10,200; income taxes payable. $6,000; long-term note payable. $26,000; accounts payable. $45,000; retained earnings. $76,100; and common stock, 100.000 shares outstanding, par $1 per share (originally sold and issued at $1 .25 per share).

Required: 1. Based on these data, prepare a 2005 balance sheet. Use the following major captions (list the individual items under these captions):

a. Assets: Current Assets. Long-Term Investments, Fixed Assets, and Other Assets.

b. Liabilities: Current Liabilities and Long-Term Liabilities.

c. Stockholders' Equity: Contributed Capital and Retained Earnings. 2. What is the net book value of the

a. Inventory?

h. Accounts receivable?

c. Store equipment'.'

d. Note payable (long term)'.'

Explain what these values mean.