[The following information applies to the questions displayed below.] The accoun

Question

[The following information applies to the questions displayed below.]

The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2016 and 2017.

Required:
1. Prepare balance sheets for the business as of December 31, 2016 and 2017. (Hint: Report only total equity on the balance sheet and remember that total equity equals the difference between assets and liabilities.)

December 31 2016 2017 Cash $ 42,759 $ 6,324 Accounts receivable 23,210 18,197 Office supplies 3,661 2,682 Office equipment 112,390 119,717 Trucks 43,980 52,980 Building 0 146,610 Land 0 36,583 Accounts payable 61,020 30,264 Note payable 0 83,193

Explanation / Answer

We know that Assets = Liabilities + Equity

In the present scenario, we have all the figures of Assets and Liabilities but we do not have figure of Equity. So, using the above equation, we will find the figure of equity as balancing figure as follows

Equity = Assets - Liabilities

Equity + Liabilities 2016 2017 Assets 2016 2017 Amount $ Amount $ Amount $ Amount $ Equity          164,980          269,636 Fixed Assets (Balancing Figure) Office Equipment          112,390          119,717 Trucks            43,980            52,980 Long term liabilities Building                     -            146,610 Note Payable                     -              83,193 Land                     -              36,583 Current Liabilities Current Assets Accounts Payable            61,020            30,264 Cash            42,759              6,324 Accounts Receivable            23,210            18,197 Office Supplies              3,661              2,682 Total          226,000          383,093 Total          226,000          383,093

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