Solution-Prepare a revised balance sheet for the business

Prepare a revised balance sheet for the business

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Reference no: EM13535039

The company's most recent balance sheet given below. The business uses very conservative accounting methods for certain expenses, but it could have used more liberal accounting methods for these expenses. The more liberal accounting methods would have caused the following results:

Accounts receivable balance would have been $50,000 higher
Inventory would have been $225,000 higher
Accumulated depreciation would have been $300,000 lower

Using the landscape format, prepare a revised balance sheet for the business giving effect to these differences. (Ignore income tax effects.)

Assets		Liabilities & Owners' Equity
Cash	$1,500,000	Accounts Payable	$700,000
Accounts Receivable	$1,000,000	Accrued Expenses Payable	$600,000
Inventory	$1,800,000	Short-term Notes Payable	$1,500,000
Prepaid Expenses	$300,000	Total Current Liabilities	$2,800,000
Total Current Assets	$4,600,000	Long-term Notes Payable	$2,000,000
Property, Plant, & Equipment	$4,800,000	Owners Equity:
Accumulated Depreciation	($1,400,000)	Capital Stock (10,000 shares)	$1,000,000
Cost Less Depreciation	$3,400,000	Retained Earnings	$2,200,000
Total Assets	$8,000,000	Total Owners' Equity	$3,200,000
		Total Liabilities & Owners' Equity	$8,000,000

Reference no: EM13535039

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Prepare a revised balance sheet for the business

Reference no: EM13535039

Reference no: EM13535039

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