Nybrostrand Company 2011 Prepare a balance sheet Module 2
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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.
Nybrostrand Company
31-Dec-11
Trial Balance (accounts in alphabetical order)
Debit
Credit
Accounts payable
78,000
Accounts receivable
36,500
Cash
16,700
Common stock
10,000
Depreciation expense
24,350
Cost of goods sold
317,000
Equipment (net of depreciation)
395,000
Insurance
1,400
Inventory
34,000
Long-term debt
127,000
Marketing
4,500
Paid-in capital
50,000
Property taxes
16,900
Rent
28,000
Retained earnings
?
Revenues
586,000
Salaries
78,500
Utilities
6,700
Total
959,550
851,000
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.
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Solution Summary
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.
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Your tutorial is attached in excel (click in cells to see computations). I have shown ...
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