Question

BALANCE SHEET I. Rhonda Rancher has applied for a loan. Her banker, Larry Loanmaker, says the old balance sheet on file must be brought up to date before a loan will be considered. Rhonda spends the rest of the afternoon taking inventory and gathering other information. Complete a balanee on a separate page using the information below compiled by Rhonda on January 22, 2019. A Grain on hand a Hay on hand A Growing wheat L Farm mortgage (duel4/1/19) 3500 bu.@ S5.00 per bu. 17500 100 tons @$80.00 per ton tooo 200 acres @ $69.80 per acre 13460 $13,000 principal $10,000 accrued interest $260,000 $68,000 balance after 4/01/19 payment L Note payable on feeder cattle (all due 4/15/19) h Calves (to be sold in May 2019) A Feeder cattle (to be sold in 60 days) L Note payable at bank (all due 3/1/019) A Vehicles A Other machinery & equipment L Loan on beef cows (due 10/01/19) 100 head@ $605 per head &O 125 head@ $800 per head to000 $82,000 $30,500 $130,500 $12,000 principal, $2,200 accrued interest balance after 10/1/15 payment $34,000 1000 acres @ $1800 per acre ItoB, A Land (present market value) A Beef breeding cows A Bulls A Checking account balance L Account payable at Joe's Feed &Seed A Account receivable A Shop Equip. (welder, lathe, drill press, etc.) 110 head @$1000 per head 11o,00 4 head @$2,200 each o $33,400- $6,500 $3,600 $5,000 100 shares @ $90 per share 1000 A Corporate Stock Other Information A I) Has paid in advance for $6,000 worth of feed in order to get a good price on it. The foed will be delivered in May, 2019 L 2) Income and social security taxes on 2018 income (not yet paid) are estimated at $14200 Ot 3) Rhonda contributed $590,000 to get her business started OE 4) Retained earnings since the beginning of the business equals $655,000

Answer 1

Solution:

	Balance Sheet
	Assets	USD	USD	Liabilities	USD	USD
	Non-current assets			Current liabilities
	Buildings	68000		Notes payable	45000
	Vehicles	30500		Bank - notes payable	82000
	Other machinery	130500		Accounts payable	6500
	Land	1221140		Security tax	14200	147700
	Beef	11000
	Bulls	8800		Non current loan
	Shop equipment	5000	1474940	Farm mortgage	270000
	Current assets			interest accrued	10000
	calves	60500		Loan on beef cows	34000
	Feeder	100000		interest accrued	2200	316200
	Prepaid	6000		Owners equity and retained earnings
	Accounts receivable	3600		Retained earnings	655000
	Inventory	39460		Owners equity	599000	1254000
	Cash	33400	242960
			1717900			1717900
	Inventory
		USD
	Grain	17500
	Hay	8000
	Growing	13960
	Total	39460
1	Owner equity	599000
2	Working capital	95260
	( Current assets- current liabilities)
3	Current ratio	1.42
	(current assets less cash/current liab
4	Debt/asset ratio	0.18
	(non - current loan/total assets)
5	Equity/asset ratio	0.73
	( Owner equity+retained earnings/assets)