The following data relate to Preston Company as of December 31, 19XX: Building $

Question

The following data relate to Preston Company as of December 31, 19XX: Building $44,000 Accounts receivable $24,000 Cash 17,000 Loan payable 30,000 J. Preston, capital 65,000 Land 21,000 Accounts payable ? Prepare a balance sheet in good form as of December 31, 19XX. 4. Statement preparation The following information is taken from the accounting records of Grimball Cardiology at the close of business on December 31, 19X1: Accounts payable $ 14,700 Surgery revenue $175,000 Surgical expenses 80,000 Cash 60,000 Surgical equipment 37,000 Office Equipment 118,000 Salaries expense 30,000 Rent expense 15,000 Accounts receivable 135,000 Loan payable 10,300 Utilities expense 5,000 All equipment was acquired just prior to year-end. Conversations with the practice's bookkeeper revealed the data that follow. Rose Grimball, capital (January 1, 19X1) $300,000 19X1 owner investments 2,000 19X1 owner withdrawals 22,000 Instructions a. Prepare the income statement for Grimball Cardiology in good form. b. Prepare a statement of owner's equity in good form. c. Prepare Grimball's balance sheet in good form.

Explanation / Answer

hey refer this balance sheet by me cash- 80,000 AR(net)- 52,200 Inventories- 57,000 Investments- 76,300 Equip(net)- 96,000 Patents- 32,000 Total Assets= 393,500 AP- 75,000 Long term Liabilities- 100,000 Owners Equity- 218,500 Total Liabilities & OE= 393,500 Additional Info- 1. Cash includes cash surrender value of a life ins policy of 9,400 and a bank overdraft of2,500 has been deducted 2.The net AR balance includes- AR debit balance of 60,000. AR credit balance of 8,000 and allow for doubtful accounts of 3,800 3. Inventories do not include goods costing 3,000 shipped out on consignment. Receivables of 3,000 were recorded 4. Investments include investments in common stock, trading 19,000, and available for sale 48,300, and franchises of 9,000 5. Equipment costing 5,000 with accumulated depreciation of 4,000 is no longer used and is held for sale. Accum depreciation for other equip is 40,000 Solution: Cash(80000-9400+2500) 73,100 A/R (60,000-3000) 57000 less doubtful acc 3,800 Inventories (57,000+3000) 60000 Life ins policy 9,400 Investments(76300-9000) 67,300 Equip 135,000 less accum dep 40,000 Equip 5,000 less accum dep 4,000 franchise 9,000 patents 32,000 TOTAL ASSETS $400,000 Liabilities Bank overdraft 2500 A/P (75000+4000) 79,000 Long term liabilities 100,000 Stockholders equity 218,500 TOTAL LIABILITIES & OE $400,000 I've balanced it for you, for the sake of balancing, but some of your items are wrongly classified. Fixed assets not used as fixed assets but meant for sale should be similar to inventory, i.e. in current assets. Consignment goods of $3000 - you have to be consistent; if you want to put it back into consignment goods, you have to remove the receivable of $3000, you can't have the receivable AND the consignment goods. Consignment goods not sold should remain in inventory and no receivable shd be recognised Investments available for sale are long term, held for trading are current assets. I think you have a typo. Credit balances in AR you typed as 8000, but you made an adjustment for 4000 You should not net off positive bank balance against an overdraft. I've regrossed them for you.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.