prepare a revised balance sheet, Financial Accounting

Assignment Help:
#questionBroadway Scripts is a service-type enterprise in the entertainment field, and its manager, Joe Numbers, has only a limited knowledge of accounting. Joe prepared the following balance sheet, which, although arranged satisfactorily, contains certain errors with respect to such concepts as the business equity and the asset valuation. Joe owns all of the corporation’s outstanding stock.

BROADWAY SCRIPTS
Balance Sheet
November 30, 2002
Assets Liabilities & Owner’s Equity
Cash $ 4,100 Liabilities:
Notes Receivable 3,000 Notes Payable $ 70,000
Accounts Receivable 2,740 Accounts Payable 36,210
Land 80,000 Total Liabilities $106,210
Building 61,850 Owner’s Equity:
Office Furniture 9,220 Capital Stock 10,000
Other Assets 24,000 Retained Earnings 68,700
Total $184,910 Total $184,910

In discussion with Joe and by inspection of the accounting records, you discover the following facts:
1. The amount of cash, $4,100, includes $3,000 in the company’s bank account, $520 on hand in the company’s safe, and $580 in Joe’s personal savings account.
2. One of the notes receivable in the amount of $750 is an IOU that Joe received in a poker game several years ago. The IOU is signed by “J.R.,” whom Joe met at the game but has not heard from since.
3. Office furniture includes $3,000 for a Persian rug for the office purchased on November 25. The total cost of the rug was $10,000. The business paid $2,900 in cash and issued a note payable to Mohair Carpet for the balance due ($7,000). As no payment on the note is due until January, this debt is not included in the liabilities above.
4. Also included in the amount for office furniture is a computer that cost $1,200 but is not on hand because Joe donated it to a local charity.
5. The “Other Assets” of $24,000 represent the total amount of income taxes Joe has paid the federal government over a period of years. Joe believes the income tax law to be unconstitutional, and a friend who attends law school has promised to help Joe recover the taxes paid as soon as he passes the bar exam.
6. The asset “Land” was acquired at a cost of $25,000 but was increased to a valuation of $60,000 when a friend of Joe offered to pay that much for it if Joe would move the building off the lot.
7. The accounts payable include business debts of $31,400 and the $4,810 balance owed on Joe’s personal MasterCard.



Instructions
a. Prepare a corrected balance sheet at November 30, 2002.
b. For each of the seven numbered items above, use a separate numbered paragraph to explain whether the treatment followed by Joe is in accordance with generally accepted accounting principles.
.

Related Discussions:- prepare a revised balance sheet

Assignment, 1- Journalize May transactions. Entry: 1. May 1 Owner H.Hadi...

1- Journalize May transactions. Entry: 1. May 1 Owner H.Hadi invested $40,000 in the business. 2. May 4 Equipment was purchased at a cost of $7,000; a three-month, 10% note pa

Illustration of corporate tax-income tax-financial statement, Illustration ...

Illustration of Corporate tax During the year ended31/12/2003, A Ltd. had estimated the corporation tax for the year to be £100,000. The amount was still outstanding as at 31/1

Looking for final acounts, Looking for Income Statement and Balance Sheet f...

Looking for Income Statement and Balance Sheet for the Better USA, Inc. company for 2010 and 2011 There are two sets of numbers, after each category. The first will represent 2010

Determine income statement and balance sheet, Prepare an Excel spreads...

Prepare an Excel spreadsheet containing the following: - Construct the next five-year pro-forma statements (income statement and balance sheet). - Estimate annual F

Assignment, Can you do the attacched quections by Monday?

Can you do the attacched quections by Monday?

The surplus capital method-partnership, THE SURPLUS CAPITAL METHOD Unde...

THE SURPLUS CAPITAL METHOD Under this method, the initial amounts repaid to partners are in order to reduce their capitals to amounts such that these are now in the same ratio

Experienced auditor, Experienced Auditor - An AUDITOR who has a reasonable ...

Experienced Auditor - An AUDITOR who has a reasonable understanding of audit activities and has studied company's industry as well as accounting and auditing issues relevant to the

Designs income statement, Please use the information below to complete Form...

Please use the information below to complete Form 1120S and the Schedule K-1%u2019s for Form 1120S. Blank forms can be found on the Hands-On Assignment page or in Doc Sharing. If y

How accounting objectives can be achieved, How Accounting objectives can be...

How Accounting objectives can be achieved There are two main ways by which this can be achieved: All the accounting records are maintained at the head office; or Each

Asch experiments, Asch Experiments In these basics studies by Solomon ...

Asch Experiments In these basics studies by Solomon Asch, groups of seven or 8 people were put in a classroom and shown two cards by the experimenter. The first card had a mai

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd