Question

statement and a statem flows, treat the pe Instructions a. Prepare a balance sheet at Septem for Notes Payable.) b. Prepare a balance sheet at October 6, 2015. Also prepare an income statem of cash flows for the period October 10, 2015. In your statement of cash flo chase of supplies and the payment of accounts payable as operating activities. Assume the notes payable do not come due for several years. Is The Soda Sh financial position on September 30 or on October 6? Explain briefly. oda Shop in a strong ess needs to obtain ation, Anita Spence ollowing balance shee ch concepts as the bus 02-4, LO2-8 ROBLEM 2.9A reparing a Balance Sheet scussion of Accounting Inciples Anita Spencer is the founder and manager of Spencer Playhouse. The business need bank loan to finance the production of its next play. As part of the loan application. An was asked to prepare a balance sheet for the business. She prepared the following bala which is arranged correctly but contains several errors with respect to such concepts ness entity and the valuation of assets, liabilities, and owners' equity. SPENCER PLAYHOUSE BALANCE SHEET SEPTEMBER 30, CURRENT YEAR Assets Liabilities & Owner's Equity $ Cash Accounts Receivable Props and Costumes ........ Theater Building Lighting Equipment Automobile Total $ 21,900 132,200 3,000 27,000 9,400 15,000 $208,500 Liabilities: Accounts Payable Salaries Payable Total liabilities Owner's equity: Anita Spencer, Capital Total 6,000 29,200 35,200 $ 173,300 $208,500
need problem 2.9a answered, instructions a and b answered thanks

Answer 1

a)
Spencer Playhouse
Balance Sheet
30-Sep-15
Assets			Liabilities and Owner's Equity
Cash (21900 - 5000)	$                                                   16,900.00	Liabilities
Accounts receivable	$                                                     7,200.00	Accounts payable	$     3,900.00
Props and costumes	$                                                   18,000.00	Notes payable	$   15,000.00
Lighting equipment	$                                                     9,400.00	Salaries payable	$     4,200.00
		Total liabilities	$   23,100.00
		Owner's equity
		Anita Spencer, capital	$   28,400.00
Total	$                                                   51,500.00	Total	$   51,500.00
b)
1. The amount of cash, S21, 900, includes $15,000 in the company's bank account $1, 900 on hand in the company's safe, and $5,000 in Anita Spencer's personal savings account.	The cash in Anita’s personal savings account is not an asset of the Spencer Playhouse company. Therefore, it should not appear in the balance sheet of the business. The money on deposit in the business bank account ($15,000) and in the company safe ($1,900) constitute cash owned by the business.
2. The accounts receivable listed as $132, 200 include $7, 200 owed to the business by Artistic Tours. The remaining $125,000 is Anita Spencer's estimate of future ticket sales from September 30 through the end of the year (December 31).	The amounts expected from future tickets sales do not relate to completed transactions and are not yet assets of the business.The amount receivable from Artistic Tours ($7,200) should  only be included in the company’s accounts receivable .
3. Anita Spencer explains to you that the props and costumes were purchased several days ago for $18,000. The business paid $3,000 of this amount in cash and issued a note payable to Actors' Supply Co for the remainder of the purchase price ($15,000). As this note is not due until January of next year it was not included among the company's liabilities.	The props and costumes should be shown in the balance sheet at their cost, $18,000 and the note that is due in January next year should be shown in liabilities.
4. Spencer Playhouse rents the theater building from Kievits International at a ratio of $3 000 a month. The $27,000 shown in the balance sheet represents the rent paid through September 30 of the current year Kievits International acquired the building seven years ago at a cost of $135,000.	The theater building is not owned by Spencer Playhouse. Therefore, it is not an asset so it should not appear in the balance sheet.
5. The lighting equipment was purchased on September 26 at a cost of $9, 400 but the stage manager says that it isn't worth a dime.	The lighting equipment is an asset and it should be shown at its cost, $9,400.
6. The automobile is Anita Spencer's classic 1978 Jaguar, which she purchased two years ago for $9,000. She recently saw a similar car advertised for sale at $15,000. She does not use the car in the business, but it has a personalized license plate that roads "PLAHOUS"	The automobile is used for personal use and its is not an asset of the business entity. Therefore, it should not be included in the balance sheet of the business
7. The accounts payable include business debts of $3, 900 and the $2, 100 balance of Anita Spencer's personal Visa card	The accounts payable should be limited to the debts of the business, $3,900 and personal liabilities are not shown in the Balance sheet.
8. Salaries payable include $25,000 offered to Mario Dane to play the lead role in a new play opening next December and $4, 200 still owed to stagehands for work done through September 30.	Mario Dane will  perform lead role in a new play in next December, he has not yet performed and, therefore, is not yet owed any money so it should be shown as liabilities.
9. When Anita Spencer founded Spencer Playhouse several years ago, she invested $20,000 in the business. However, Live Theatre, Inc, recently offered to buy her business for $173, 300 Therefore, she listed this amount as her equity in the above balance sheet.	Owner’s equity is not valued at either the original amount invested or at the estimated market value of the business. The excess of total assets over total liabilities is owners' equity.The  amount of Anitha’s capital should be determined by subtracting the corrected figure for total liabilities ($23,100) from the corrected amount of total assets ($51,500). This indicates owners’ equity of $28,400.