Question

John Smith, manager of Smith Foods, needs assistance in preparing the company's balance sheet at December 31, 2019. Financial information available is as follows: Account Title Account Balance Mortgage payable Accounts payable Accounts receivable Cash Accrued expenses $310,000(1) 30,000 25,000 10,000 15,000 Income taxes payable Inventory--food Inventory--supplies Prepaid insurance Common stock 10,000 11,000 2,000 4,000(2) 275,000 Investments Land Prepaid maintenance Buildings Furniture 50,000 100,000 1,000 800,000 100,000 Equipment Allowance for doubtful accounts Accumulated depression Retained earnings 200,000 2,000 400,000 241,000(3) (1) Fifty thousand of this mortgage payable must be paid on June 30, 2020. (2) The prepaid insurance of $4,000 pertains to the period of October 1, 2019- September 30, 2020. This account has not been adjusted to reflect expired insurance as of December 31, 2019. (3) This account has not been adjusted to reflect the "preliminary" net income of $20,000 for 2019 or information from note 2 above. Required: Prepare the balance sheet for Smith Foods at December 31, 2019.

Prepare the balance sheet for Smith Foods at December 31, 2019.

Answer 1

Smith Foods
Balance Sheet
December 31, 2019
Assets				Liabilities and Stockholders' Equity
Particulars				Particulars
Current assets				Current liabilities
Cash and cash equivalent		10000		Accounts Payable		30000
Accounts receivable	25000			Accrued Expenses		15000
Less Allowance for doubtful debt	-2000	23000		Income taxes payable		10000
Inventory				Current portion of long term debt		50000
Inventory food	11000			Total Current Liabilities			105000
Inventory supplies	2000	13000
Prepaid Expenses				Non Current liabilities
Prepaid Insurance	3000			Mortgage Payable	310000
Prepaid maintenance	1000	4000		Less: Current portion of debt	-50000	260000
Total Current Assets			50000	Total Non Current Liabilities			260000
Non Current assets				Stockholders Equity
Investments		50000		Common stock		275000
Total Non Current Assets			50000	Retained Earning		260000
				Total Stockholders' Equity			535000
Property, Plant & Equipment
Land	100000
Buildings	800000
Furniture	100000
Equipment	200000
Less Accumulated Depriciation	-400000	800000
Total Property, Plant & Equipment			800000
Total assets			900000	Total Liabilities and Stockholders' Equity			900000