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?