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PROBLEM 2.1A Preparing and Evaluating a Balance Sheet LO2-4 Listed in random order are the items to be included in the balance sheet of Rocky Mountain Lodge at December 31, year 1.

PROBLEM 2.1A Preparing and Evaluating a Balance Sheet LO2-4 Listed in random order are the items to be included in the balance sheet of Rocky Mountain Lodge at December 31, year 1.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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liability. PROBLEM 2.1A Preparing and Evaluating a Balance Sheet LO2-4 Listed in random order are the items to be included in the balance sheet of Rocky Mountain Lodge at December 31, year 1. $ 47,040 $600,000 Equipment Buildings Land 510,000 Capital Stock 162,000 Accounts Payable 65,760 Cash 37,680 Accounts Receivable 12,720 Furnishings 70,440 Salaries Payable 40,200 Snowmobiles 18,480 Interest Payable 14,400 Notes Payable 744,000 Retained Earnings Instructions a. Prepare a balance sheet at December 31, year 1. Include a proper heading and organize your balance sheet similar to Exhibit 2-9. You will need to compute the amount to be shown for Retained Earnings. b. Assume that no payment is due on the notes payable until year 3. Does this balance sheet indicate that the company is in a strong financial position as of December 31, year 1? Explain briefly. c. PROBLEM 2.2A Interpreting the Effects of Business Transactions L02-3 d. The following six transactions of Memphis Moving Company, a corporation, are summarized in equation form, with each of the six transactions identified by a letter. For each of the transactions (a) through (f) write a separate statement explaining the nature of the transaction. For example, the explanation of transaction (a) could be as follows: Purchased equipment for cash at a cost of $3,200.
Transcribed Image Text:liability. PROBLEM 2.1A Preparing and Evaluating a Balance Sheet LO2-4 Listed in random order are the items to be included in the balance sheet of Rocky Mountain Lodge at December 31, year 1. $ 47,040 $600,000 Equipment Buildings Land 510,000 Capital Stock 162,000 Accounts Payable 65,760 Cash 37,680 Accounts Receivable 12,720 Furnishings 70,440 Salaries Payable 40,200 Snowmobiles 18,480 Interest Payable 14,400 Notes Payable 744,000 Retained Earnings Instructions a. Prepare a balance sheet at December 31, year 1. Include a proper heading and organize your balance sheet similar to Exhibit 2-9. You will need to compute the amount to be shown for Retained Earnings. b. Assume that no payment is due on the notes payable until year 3. Does this balance sheet indicate that the company is in a strong financial position as of December 31, year 1? Explain briefly. c. PROBLEM 2.2A Interpreting the Effects of Business Transactions L02-3 d. The following six transactions of Memphis Moving Company, a corporation, are summarized in equation form, with each of the six transactions identified by a letter. For each of the transactions (a) through (f) write a separate statement explaining the nature of the transaction. For example, the explanation of transaction (a) could be as follows: Purchased equipment for cash at a cost of $3,200.
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