Steps to preparation of a balance sheet
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#1 I need step-by-step help on solving this problem. I got the first answer. Cash $90,000-$12,400 (life ins policy)=$77,600. The $77,600+$1,500 (overdraft) = $79,100. correct?
I moved on to #2 and all I know is that (b) is from accounts payable. I didn't understand #2 really well. It seems that in (a) the debit balances are $60,000, but the information says $52,200. I don't know where the $7,800 goes or how to calculate the answer.
#3 Line 3 does not make any sense. Please help. I assume the $5,000 receivables goes on Accounts receivable (net) in first column. (second sentence) need help with that too.
#4 I am confused whether the investments go on the left or right column. I am confused about Franchises of $9000. (credit or debit) also should it be affecting stockholders equity as well? please help with this.
#5 I am not sure if I have to take $10,000 out of $86,000 and subtract $6,000 (should leave me $4000). I'm lost as to what to do with the $40,000. Should I subtract it from $86,000? I am lost.
The only instructions were to prepare a balance sheet. but I think there is more to it than that. I feel like I am lost.
Please see Sprint document attached
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Solution Summary
The problem presents a balance sheet which is not in proper form. In addition, there are a series of adjustments to be made. The solution sets up a workable format and explains the necessity for the entries.
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The best way to prepare a balance sheet, and deal with the changes that are required is to set up a work sheet. The first two columns will be the unadjusted trial balance as prepared by the bookkeeper. The second set of two columns will represent the adjusting entries, and the third set will be the balance sheet in good form. Good form means segregating current assets ...
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