Question

The following is the balance sheet of Korver Supply Company at December 31, 2020 (prior year). KORVER SUPPLY COMPANY Balance Sheet At December 31, 2020 Assets $125,000 340,000 290,000 155,000 Cash Accounts receivable Inventory Furniture and fixtures (net) $910,000 Total assets Liabilities and Shareholders' Equity Accounts payable (for merchandise) Notes payable Interest payable Common stock $270,000 280,000 7,000 120,000 233,000 Retained earnings Total liabilities and shareholders' equity $910,000 Transactions during 2021 (current year) were as follows: 1. Sales to customers on account $1,000,000 2. Cash collected from customers 980,000 Purchase of merchandise on 3. account 520, 000 4. Cash payment to suppliers 5. Cost of merchandise sold Cash paid for operating 530,000 470,000 6. expenses 360,000

Answer 1

The classified balance sheet is attached below:

KROVER Statement at 31 SUPPLY COMPANY of financial Position December, 2021 BONUD ASSETS CURRENT ASSETS Cosh Accounts Recerrable i Inventory TOTAL CURRONT ASSETS $20 1,000 360,000 340,000 901,000 FIXED ASSETS Furnture & Fixtures Groes value Lessf Accun. Depresion OD 2010 To rel NON-CURRENT ASSETS TOTAL ASSETS $500,000 (3,85,000 115000 10000 LIABILITIES AND EQUITY CURRENT LIABILTIES Accounts Payable Notes Payable Interest Payable $269000 $ 280,000 But 7,000 Total CURRENT GABIUTIUS 2547000

SHAREHOLDERG EQUITY 18 PAID-IN Retained Capital earnings $ 120,000 349,000. 469,000 TOTAL EQUITY $10lGOOD TOTAL LABUTES & Equity

Accounts Receivable Ale n ot -To bal bid 340000 NDO a By Cesh at 1980,000 To sales 1,000,000 By bal old CBI ftuar 13 60000 1240000 1340000 Inventory Ak To bal bid 290.000 By bald of sale 470,000 To Purchoses 520,000 By bal eld 3.40,000 4814) 810000 1 810000

Cash AIC To bol bid $125000 To Acconal Ree 980000 By Alccoul Pagabe $530000 By Oper expenses 360000 By Intered AIC 14000 by balance cld 201000 $110.5000 1$ 105,000 Calevletion of Net Income sales to Customers $ 1,000,000 Lesst Cost of Goods sald uro, voo Operating eupenses 360, voo Interst faid openg Belo 7ooo Pard (4000 Lesot Propand 9oool Depreoton Goood $ 116,000

Calculation of Relained earnungs Openis as on January 1 $2,33,000 & Nel Income 116,000 Clasing Relaund canny $ 349,000