HERE COME THE CLOWNS! is the name of a traveling circus. The ledger accounts of the business at June 30, 2007, are listed here in alphabetical order:
Accounts Payable | $ 26,100 | Notes Payable | $180,000 |
Accounts Receivable | 7,450 | Notes Receivable | 9,500 |
Animals | 189,060 | Props and Equipment | 89,580 |
Cages | 24,630 | Retained Earnings | 27,230 |
Capital Stock | 310,000 | Salaries Payable | 9,750 |
Cash | ? | Tents | 63,000 |
Costumes | 31,500 | Trucks&Wagons | 105,840 |
Instructions
a. Prepare a balance sheet by using these items and computing the amount of Cash at June 30. 2007. Organize your balance sheet similar to the one illustrated in Exhibit 2-10. (After “Accounts Receivable.” you may list the remaining assets in any order. ) 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 $14,300. 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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