(Corrections of a Balance Sheet) The bookkeeper for Garfield Company has prepared the following balance sheet as of July 31, 2012.
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GARFIELD COMPANY |
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Cash |
$69,000 |
Notes and accounts payable |
$44,000 |
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Accounts receivable (net) |
40,500 |
Long term liabilities |
75,000 |
|
Inventory |
60,000 |
Stockholders’ equity |
155,500 |
|
Equipment (net) |
84,000 |
$274,500 |
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Patents |
21,000 |
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$274,500 |
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The following additional information is provided.
1. Cash includes $1,200 in a petty cash fund and $12,000 in a bond sinking fund.
2. The net accounts receivable balance is comprised of the following three items: (a) accounts receivable—debit balances $52,000; (b) accounts receivable—credit balances $8,000; (c) allowance for doubtful accounts $3,500.
3. Merchandise inventory costing $5,300 was shipped out on consignment on July 31, 2012. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,300 were recognized on these consigned goods.
4. Equipment had a cost of $112,000 and an accumulated depreciation balance of $28,000.
5. Taxes payable of $9,000 were accrued on July 31. Garfield Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset against the taxes payable amount.
Instructions
Prepare a corrected classified balance sheet as of July 31, 2012, from the available information, adjusting the account balances using the additional information.