Listed below in random order are the items to be included in the balance sheet of Deep River Lodge at December 31, 2007:
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…. | 202.400 |
Instructions
a.Prepare a balance sheet at December 31, 2007. Include a proper heading and organize your balance sheet similar to the illustrations shown in Chapter 2. (After “Buildings,” you may list the remaining assets in any order.) 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 2009. Does this balance sheet indicate that the company is in a strong financial position as of December 31, 2007? Explain briefly.
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