Preparation of balance sheet
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28. The following balance sheet was prepared by the bookkeeper for
Jim Starr Company as of December 31, 1998.
Jim Starr Company
Balance Sheet
as of December 31, 1998
Cash $ 80,000 Accounts Payable $ 75,000
Accounts receivable (net) 52,200 Long-term liabilities 100,000
Inventories 57,000 Stockholders' equity 218,500
Investments 76,300
Equipment (net) 96,000
Patents 32,000
-------- --------
$393,500 $393,500
The following additional information is provided:
1. Cash includes the cash surrender value of a life insurance policy
$9,400, and a bank overdraft of $2,500 has been deducted.
2. The net accounts receivable balance includes:
(a) accounts receivable--debit balances $60,000;
(b) accounts receivable--credit balances $4,000;
(c) allowance for doubtful accounts $3,800.
3. Inventories do not include goods costing $3,000 shipped out on
consignment. Receivables of $3,000 were recorded on these goods.
4. Investments include investments in common stock, trading $19,000
and available-for-sale $48,300, and organization costs $9,000.
5. Equipment costing $5,000 with accumulated depreciation $4,000 is
no longer used and is held for sale. Accumulated depreciation on
the other equipment is $40,000.
INSTRUCTIONS
Prepare a balance sheet in good form (stockholders' equity details
can be omitted.)
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Solution Summary
The solution contains preparation of Balance sheet in good form when incorrect balance sheet was given.
Solution Preview
Dear student,
Answer attached.
Balance sheet
Liabilities Assets
Accounts payable 75000 cash 73100
Bank overdraft 2500 Life Insurance Policy 9400
Long term liabilities 100000 Acounts ...
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