Preparing and Evaluating Balance Sheet Information
The following data are available:
|
Cash |
$100,000 |
|
Accounts payable |
55,000 |
|
Retained earnings |
? |
|
Invested capital |
150,000 |
|
Buildings and equipment |
600,000 |
|
Mortgage payable |
400,000 |
Required
a. Prepare a balance sheet.
b. Would most businesses, in reality, have such a limited balance sheet? Why not?
c. What other accounts might usually be found in a balance sheet for a service company? Discuss the differences between balance sheets for companies providing services versus those manufacturing products. Why are these differences essential? How are they useful to the financial analyst?