Preparing a Balance Sheet and Analyzing Some of Its Parts (P5-3)TangoCo is developing its...

Preparing a Balance Sheet and Analyzing Some of Its Parts (P5-3)

TangoCo is developing its annual financial statements for 2012. The following amounts were correct at December 31, 2012: cash, $48,800; investment in stock of PIL Corporation (long-term), $36,400; store equipment, $67,200; accounts receivable, $71,820; inventory, $154,000; prepaid rent, $1,120; used store equipment held for disposal, $9,800; accumulated depreciation, store equipment, $13,440; income taxes payable, $9,800; long-term note payable, $32,000; accounts payable. $58,800; retained earnings, $165,100: and common stock, 100,000 shares outstanding, par value $1 per share (originally sold and issued at $ 1.10 per share).

Required:

1. Based on these data, prepare a 2012 balance sheet. Use the following major captions (list the individual items under these captions):

 a.Assets: Current Assets, Long-Term Investments, Fixed Assets, and Other Assets.

 b.Liabilities: Current Liabilities and Long-Term Liabilities.

 c.Stockholders” Equity: Contributed Capital and Retained Earnings.

2. What is the net book value of the store equipment? Explain what this value means.