Question

Crane Company was formed on January 1, 2022. At December 31, 2022, Mikou, the president and sole stockholder, decided to prepare a balance sheet, which appeared as follows Accounts receivable December 31, 2022 Liabilities and stockholders' Equity $20.500 Accounts payable $32,700 61.000 Notes payable 15,800 36,000 atlon 27,000 25,000 Stackholders' uity 67,000 Inventory Miko willingly admits that she is not an accountant by training. She is concerned that her balance sheet might not be correct. She has provided you with the following additional information 1. 2. 3. The boat actually belongs to Miko, not to Crane Company. However, because she thinks she might take customers out on the boat occasionally, she decided to list it as an asset of the company. To be consistent, the le listed a b ility of the corporation her personal loan that she took out at the bank to buy the boat The inventory was originally purchased for $25,900, but due to a surge in demand Mike now thinks she could sell for $35.000. She thought it would be best to record it at $36,000 Included in the accounts receivable balance is $10,700 that Mike loaned to her brother 5 years ago Mike included this in the recevables of Crane Companys she wouldn't forget that her brother owes her money (b) Provide a corrected balance sheet for Crane Company (Hot To get the balance sheet to balance, adjust stockholders' equity) (List assets in order of liquidity)

Answer 1

Please find below table useful to compute desired results: -

А 1 Assets 2 Cash 3 Accounts Receivable 4 Inventory 5 Boat 6 7 Inventory Purchased 8 Market price of Inventory B Liabilities and Stockholders' Equity 20500 Accounts Payble 61000 Notes Payable 36000 Boat Loan 25000 Stocholders' Equity 28900 36000 DE CRANE COMPANY 32700 Balance sheet 15800 Dec. 31, 2022 27000 Assets 67000 Cash =B2 Accounts Receivable =B3-B10 Inventory =B7 Total Assets Liabilities & Stockholders Equity Liabilities Accounts Payable Notes Payable =D3 Total Liabilities Stockholders Equity Total Liabilities and stockholders' equity =SUM(G5:47) 10 Loan to brother(included in AR) 10700 1=D2 =G11+G12 =H8-H13 =H13+H14

End results would be as follows: -

H 1 A Assets 2 Cash 3 Accounts Receivable 4 Inventory 5 Boat 6 7 Inventory Purchased 8 Market price of Inventory B Liabilities and Stockholders' Equity 20,500 Accounts Payble 61,000 Notes Payable 36,000 Boat Loan 25,000 Stocholders' Equity 28.900 36,000 DE G CRANE COMPANY 32,700 Balance sheet 15.800 Dec. 31, 2022 27.000 Assets 67,000 Cash 20,500 Accounts Receivable 50.300 Inventory 28.900 Total Assets Liabilities & Stockholders Equity Liabilities Accounts Payable 32.700 Notes Payable 15,800 Total Liabilities Stockholders Equity Total Liabilities and stockholders' equity 99,700 10 Loan to brother(included in AR) 10,700 48,500 51,200 99,700