*Suppose 3 friends decided to invest in a company called reliable runner that wo

Question

*Suppose 3 friends decided to invest in a company called reliable runner that would sell cars.

Jane put in 20,000, Alan put in 15,000, and Colin put in 15,000. The money was paid into an account.

*The company then obtained a bank loan for 30,000 the money was put in an account

* The company buys a small office (PPE) with a car lot for 55,000

*The company requires some inventory for trading, and it buys 18,000 of seccond hand cars for cash

* the company sold a car for 5000 cash

* The car that sold was bought for 4000

* The company has paid a car repair bill for 250

* Suppose that the company sells another car for 7000 on credit

* the cost of that car sold was 5500

* The company decides to expand its inventory and bought two more cars for 12000 on crediy

Task prepare a balance sheet for reliable runner following GAAP

*

Explanation / Answer

Reliable Runner

Account Form Balance Sheet

Tangible fixed assets:

Property, Plant and equipment (PPE)

Retained Earnings

Common stock

2250

50000

          
          
          
          
          
          
          
          
          
          
          
          
          
          
          
          

Balance Sheet Asset Amount Liabilities Amount Current Assets Current Liabilities Cash and cash equivalents 11750 Accounts payable Accounts receivable 7000 Long-term Liabilities Inventory 20500 Secured long term debt 30000 Long-term Assets Shareholders' Equity

Tangible fixed assets:

Property, Plant and equipment (PPE)

55000

Retained Earnings

Common stock

2250

50000

TOTAL ASSETS 94250 TOTAL EQUITY AND LIABILITIES 94250

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