Reference no: EM132324807
Question
The following information is given for Skylar Company for the year 2018:
ACCOUNT NAME BALANCE DESCRIPTION
Accounts Payable $2,000 Payment is due in 30 days
Cash 1,800 Includes cash in register and bank account
Common Stock 30,000 Stock issued in exchange for owners' contributions
Equipment 38,000 Includes manufacturing equipment, trucks, etc...
Land 18,900 Held for future site of new warehouse
Note Payable (long term) 25,000 Payment is due in six years
Retained Earnings 3,000 Total earnings through September 30
Salaries /Wages Payable 200 Payment is due in 7 days
Supplies 1,500 Includes copy paper, toner, pens
Required:
1. Submit a classified Balance Sheet in good form. You must date it properly and break assets and liabilities into their current and non-current classifications and show the following amounts in your Balance Sheet:
a. Total current assets
b. Total non-current assets
c. Total assets
d. Total current liabilities
e. Total non-current liabilities
f. Total liabilities
g. Total stockholders' equity
h. Total liabilities and stockholders' equity.
2. What is the Net Working Capital for Skylar Company? Be sure to show your figures for your calculations.
3. Skylar's Equipment account shows a balance of $38,000. Is this the price that Skylar paid to acquire the equipment (which is its historical cost) or is it the equipment's current selling price (market value)? Why do we report the equipment at this amount?
4. Give an example of an asset that is NOT included on the Balance Sheet. (Your book specifically outlines this). Why do we not include this asset on the Balance Sheet?