Additional information added in module 2:
One client had indicated that they were interested in purchasing $42,500 worth of products. However, the client has not actually committed to the purchase.
The bookkeeper may have made a mistake when computing cost of good sold. She included total production costs for 2011 and did not adjust ending inventory for the $42,500 worth of units left at the end of the year. The amount of ending inventory was determined using a physical count.
Additional information for module 3:
The company made a secondary offering of stock and raised an additional $150,000.
The company had already paid $15,000 in dividends before deciding on the offering.
The company now has cash to invest in a piece of raw land on which to build in the future. The investment takes place before year end. The cost of the land is $400,000, the downpayment is $50,000 and a note to the bank covers the rest.
Trial Balance (accounts in alphabetical order)
Cost of goods sold
Equipment (net of depreciation)
Prepare a balance sheet for the company in good format. Update the balance sheet for the changes to income in module 2 and also consider the effect of paying the dividend. You do not need to include the income statement.
Your tutorial is attached in excel (click in cells to see computations). I have shown ...
Your tutorial is attached in excel (click in cells to see computations). I have shown the original balance sheet and the changes for module 2 and 3. I also included the Income Statement to assist you in learning how this all fits together. Backing out the sale that should not be recorded leaves accounts receivable negative. This is a strange balance.