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Revised Balance Sheet - Perry Company

Prepare a revised balance sheet in good form, using appropriate title, headings and sub-headings.

The following balance sheet was prepared by the bookkeeper for Perry Company as of December 31, 2007.
Perry Company
Balance Sheet
For the Year Ended December 31, 2007

Cash $ 80,000 Accounts payable $ 75,000
Accounts receivable (gross) 55,000 Allowance for doubtful accounts 2,800
Inventories 57,000 Long-term liabilities 100,000
Investments 76,300 Accum. Depreciation-Equipment 40,000
Equipment (cost) 136,000 Stockholders' equity 218,500
Trademarks 32,000
Total assets $436,300 Total Liab & Equity $436,300

The following additional information is provided:
? Cash includes the cash surrender value of a CEO life insurance policy $20,000.
? Inventories above do not include goods costing $3,000 being held on our behalf by our agent in Chicago. Instead, this amount has been included in receivables as $3,000.
? Investments above include patent agreements worth $9,300.
? Stockholders' equity includes retained earnings of $118,500. The company originally issued 80,000 common shares, each with $1 par value, for a total issue price of $120,000. Subsequently, the company repurchased 10,000 shares at a cost of $2 each. The repurchased shares are being reported using the "cost method."

Prepare a revised balance sheet in good form, using appropriate title, headings and sub-headings.

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The following balance sheet was prepared by the bookkeeper for Perry Company as of December 31, 2007.
Perry Company
Balance Sheet
For the Year Ended December 31, 2007

Cash $ 80,000 Accounts payable $ 75,000
Accounts receivable (gross) 55,000 Allowance for doubtful accounts 2,800
Inventories 57,000 Long-term liabilities 100,000
Investments 76,300 Accum. Depreciation-Equipment 40,000
Equipment (cost) 136,000 Stockholders' equity 218,500
Trademarks 32,000
Total assets $436,300 Total Liab & Equity $436,300

The following additional information is provided:
? Cash includes the cash surrender value of a CEO life insurance policy $20,000.

The cash amount should be reduced by ...

Solution Summary

The solution explains how to prepare a revised balance sheet.

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