Question

The bookkeeper for Bramble Company has prepared the following balance sheet as of July 31, 2020. Cash Accounts receivable (net) Inventory Equipment (net) Patents BRAMBLE COMPANY BALANCE SHEET AS OF JULY 31, 2020 $ 72,720 Notes and accounts payable 44,220 Long-term liabilities 63,720 Stockholders' equity 84,000 21,000 $285,660 $ 47,720 78,720 159,220 $285,660 The following additional information is provided. 1. Cash includes $1,200 in a petty cash fund and $12,180 in a bond sinking fund. 2. The net accounts receivable balance is comprised of the following two items: (a) accounts receivable $47,720 and (b) allowance for doubtful accounts 53,500. 3. Inventory costing $5,056 was shipped out on consignment on July 31, 2020. The ending Inventory balance does not include the consigned goods. Recelvables in the amount of $5,056 were recognized on these consigned goods. 4. Equipment had a cost of $115,720 and an accumulated depreciation balance of $31,720. 5. Income taxes payable of $6,000 were accrued on July 31. Bramble Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance but was offset against the income taxes payable amount. Prepare a corrected classified balance sheet as of July 31, 2020, from the available information, adjusting the account balances using the additional information. (List Current Assets in order of liquidity) BRAMBLE COMPANY Balance Sheet Assets

Answer 1

Balance Sheet Assets Current Assets $ Cash Accounts Receivable Less: allowance for doubtful accounts Inventories $ $ 42,664 -3,500 $ $ $ 66,540 72720-12180+6000 47720-5056 consigned goods shouldn't treated as receivables, 39,164 68,776 | 63720+5056 consigned goods should included in our Inventory 1,74,480 Long term Investments Bond Sinking fund $ 12,180 $ 12,180 $ 84.000 $ $ 21,000 2,91,660 Property, Plant & Equipment Equipment $ 1,15,720 Less: Accumulated depreciation for Equipment $ -31,720 Intangible Assets Patents Total Assets Liabilities and stockholder's equity Current Liabilities Notes and accounts payable $ 47,720 Income Tax payable $ 6,000 Long term Liabilities Stockholder's Equity Total Liabilities & Stockholder's Equity $ $ $ $ 53,720 78,720 1,59,220 2,91,660