Problem

Preparing and Evaluating a Balance SheetListed below in random order are the items to be i...

Preparing and Evaluating a Balance Sheet

Listed below in random order are the items to be included in the balance sheet of Tri-State Lodge at December 31, 2015:

Equipment

$ 9,000

Buildings

$430,000

Land

140,000

Capital Stock

?

Accounts Payable

27,400

Cash

9,100

Accounts Receivable

3,300

Furnishings

22,600

Salaries Payable

13,200

Notes Payable

217,000

Interest Payable

4,000

Retained Earnings

225,400

Instructions

a. Prepare a balance sheet at December 31, 2015. Include a proper heading and organize your balance sheet similar to the illustrations shown in Chapter 2. You will need to compute the amount to be shown for Capital Stock.


b. Assume that no payment is due on the notes payable until 2017. Does this balance sheet indicate that the company is in a strong financial position as of December 31, 2015? Explain briefly.

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