Question

An alphabetical list of the adjusted trial balance accounts for North Country Rentals after its first year of operations ending March 31, 2020, is shown below: Account Accounts payable Accumulated depreciation, building Accumulated depreciation, furniture Advertising expense Building Cash Depreciation expense, building Depreciation expense, furniture Furniture Interest expense Interest payable Janitorial expense Land Long-term notes payable Notes receivable, due 2023 Office salaries expense Office supplies Office supplies expense Brand name Prepaid advertising Rent revenue Rent receivable Salaries payable Utilities expense Wyett North, capital Wyett North, withdrawals Adjusted Account Balance* $ 10,000 25,900 4,400 17,100 600,000 17,900 25,900 4,400 44,600 10,350 810 41,900 119,000 371,000 152,000 131,125 790 7,000 3,900 490 407,400 16,900 3,075 37,620 437,290 28,900 *Assume all accounts have a normal balance. Required: 1. Calculate the capital balance as it would appear on the March 31, 2020, balance sheet. Wyett North, capital

Answer 1

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North Country
Income Statement for the year ended March 31
Particulars	Amount $	Amount $
Revenues
Rent Revenue	407,400.00
Net Revenues		407,400.00
Expenses
Advertising expense	17,100.00
Depreciation expense, building	25,900.00
Depreciation expense, furniture	4,400.00
Interest expense	10,350.00
Janitorial expense	41,900.00
Office salaries expense	131,125.00
Office supplies expense	7,000.00
Utilities expense	37,620.00
Total Expense		275,395.00
Net Income		132,005.00

Answer 1
Statement of Owners' capital, March 31	Amount $
Opening Balance	437,290.00
Add: Net Income for the year	132,005.00
Less: Drawings	28,900.00
Closing capital balance	540,395.00

Answer 2
Balance Sheet as at March 31, 2020
Assets	Amount $	Amount $	Amount $
Current Assets
Cash		17,900.00
Rent Receivable		16,900.00
Prepaid Advertising		490.00
Office supplies		790.00
Total Current Assets			36,080.00
Long Term Investments
Notes Receivable, due 2023			152,000.00
Property, Plant & Equipment
Land		119,000.00
Building	600,000.00
Accumulated depreciation, building	(25,900.00)	574,100.00
Furniture	44,600.00
Accumulated depreciation, furniture	(4,400.00)	40,200.00
Total Property, Plant & Equipment			733,300.00
Intangible Assets
Brand name			3,900.00
Total Assets			925,280.00
Liabilities
Current Liabilities
Accounts Payable	10,000.00
Interest Payable	810.00
Salaries Payable	3,075.00
Total Current Liabilities		13,885.00
Long Term Notes Payable		371,000.00
Long Term Liabilities		371,000.00
Total Liabilities			384,885.00
Equity
Owner's Capital	540,395.00
Equity			540,395.00
Total Liabilities & Equity			925,280.00

Answer 3
Current Ratio	2.60
Current Assets/ Current Liabilities
Debt Equity Ratio	0.71
Total Liabilities/ Equity