The following list of balance sheet items are in random order for Wilson Farms. Inc., at September 30. 2007:
Land | $490.000 | Fences and Gates | $ 33.570 |
Barns and Sheds | 78.300 | Irrigation System | 20,125 |
Notes Payable | 330.000 | Cash | 16,710 |
Accounts Receivable | 22 365 | Livestock | 120.780 |
Citrus Trees | 76.650 | Farm Machinery | 42,970 |
Accounts Payable | 77,095 | Retained Earnings | ? |
Property Taxes Payable | 9 135 | Wages Payable | 5.820 |
Capital Stock | 290,000 |
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Instructions
a. Prepare a balance sheet by using these items and computing the amount for Retained Earnings. Use a sequence of assets similar to that illustrated in Exhibit 2-10. (After “Barns and Sheds.” you may list the remaining assets in any order.) Include a proper heading for your balance sheet.
b. Assume that on September 30. immediately after this balance sheet was prepared, a tornado completely destroyed one of the barns, This barn had a cost of $13,700 and was not insured against this type of disaster. Explain what changes would be required in your September 30 balance sheet to reflect the loss of this barn.
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