Preparing a Balance Sheet; Effects of a Change in Assets
Circus World is the name of a traveling circus. The ledger accounts of the business at June 30, 2015, are listed here in alphabetical order:
Accounts Payable | $ 25,000 | Notes Payable | $115,000 |
Accounts Receivable | 5,600 | Notes Receivable | 1,200 |
Animals | 310,000 | Props and Equipment | 108,000 |
Cages | 15,000 | Retained Earnings | 89,000 |
Capital Stock | 400,000 | Salaries Payable | 1,250 |
Cash | ? | Tents | 40,000 |
Costumes | 16,000 | Trucks&Wagons | 125,300 |
Instructions
a. Prepare a balance sheet by using these items and computing the amount of Cash at June 30, 2015. Include a proper balance sheet heading.
b. Assume that late in the evening of June 30, after your balance sheet had been prepared, a fire destroyed one of the tents, which had cost $10,000. The tent was not insured. Explain what changes would be required in your June 30 balance sheet to reflect the loss of this asset.
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