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    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 Preview

    Your tutorial is attached in excel (click in cells to see computations). I have shown ...

    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.

    $2.19

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