Question

The bookkeeper for Finch's Country Music Bar left this incomplete balance sheet. Finch's working capital is $108,000 and its debt to assets ratio is 40 percent. Required Complete the balance sheet by supplying the missing amounts. $ 22,000 36,000 12,000 Assets Current assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Long-term assets Building Less: Accumulated depreciation Total long-term assets Total assets Liabilities and Stockholders' Equity Liabilities Current liabilities Accounts payable Notes payable (41,000) 215,000 6,000

Answer 1

$ 22,000 S 36,000 $ 74,300 $ 12,000 $144,300 Assets Current assets Cash Accounts Receivables Inventory Prepaid Expense Total Current assets Long term assets Building Less: Accumulated depreciation Total Long term assets Total assets Liabilities and stockholders' Equity Liabilities Current Liabilities Accounts payable Notes payable Income tax payable Total Current Liabilities $ 256,000 S (41,000) $215,000 $ 359,300 $ 21,600 $ 6,000 S 8.700 IS 36.300

$ 107,420 $ 143,720 Long-term liabilities Mortagage payable Total Liabilities Stockholders' equity Common stock Retained Earnings Total Stockholders' equity Total Liabilities and stockholders' equity $ 95,000 $ 120,580 $215,580 $ 359,300 Working Notes: Working Capital = Current assets - Current liabilities $108,000 = Current assets - $36,300 Current assets = $108,000+$36,300 = $144.300 Current assets = Cash + Accounts Receivables + Inventory+Prepaid expenses $144,300 = $22.000+$36,000+Inventory +$12.000 Inventory = $144,300-$22,000-$36,000-$12,000 = $74.300 Total Assets = Current assets + Long term assets Total assets = $144,300+$215,000 = $359,300 Total long term assets = Building - accumulated depreciation $215,000 = Building - 41.000 Building = $215,000+$41,000 = $256,000

Current liabilities = Accounts payable + Notes payable+Income tax payable $36,300 = accounts payable + $6,000+$8,700 Accounts payable = $36,300-$6,000-$8,700 = $21,600 Debt to assets ratio = Total liabilities/ total assets .40 = Total liabilities/359,300 Total liabilities = $359,300*40% = $143.720 Total liabilities = Total current liabilities + Mortagage payable $143,720 = $36,300 + Mortagage payable Mortagage payable = $143,720-$36,300 = $107,420 Total assets = Total liabilities and stockholders equity Total liabilities and stockholders equity = $359,300 Total liabilities and stockholders equity = Total liabilities + Total stockholders equity $359,300 = $143,720 + Total stockholders equity Total stockholders equity = $359,300-$143,720 = $215,580 Total stockholders equity = Common stock + retained earnings $215,580 = $95.000 + Retained Eranings Retained earnings = $215,580-$95,000 = $120,580