Joe's Bike shop
As of December 31, 2008
Merchandise Inventory $30,000
Merchandise Sold, at cost $37,500
Prepaid Insurance $1,000
Advanced From customer $(1,000)
Total Current Assets $82,500
Property, Plant, and equipment:
Less Note payable $(5,000)
Total assets $85,500
Liabilities and Shareholders' equity
Bike Sales $55,000
Accumulated Depreciation $700
Rent payable $1,000
Total Current Liabilities $58,700
Common stock 1,000 shares at $10 par value $10,000
Additional Paid-in Capital $7,500
Retained Earnings $9,300
Total shareholders equity $26,800
Total liabilities and shareholders equity $85,500
Do a corrected balance sheet for Joe's shop
Please see the attached Excel spreadsheet with your answer.
From what I can see in the way that the balance sheet was initially set up, the item 'merchandise sold, at cost' should not be included in the balance sheet. Once inventory is sold, it ...
This solution prepares a corrected balance sheet for Joe's shop using the information supplied on assets, liabilities and shareholders' equity.