The bookkeeper for Stellar Company has prepared the following balance sheet as of July 31, 2020. STELLAR COMPANY BALANCE SHEET AS OF JULY 31, 2020 Cash $ 70,190 Notes and accounts payable $ 45,190 Accounts receivable (net) 41,690 Long-term liabilities 76,190 Inventory 61,190 Stockholders’ equity 156,690 Equipment (net) 84,000 $ 278,070 Patents 21,000 $ 278,070 The following additional information is provided. 1. Cash includes $ 1,200 in a petty cash fund and $ 11,890 in a bond sinking fund. 2. The net accounts receivable balance is comprised of the following two items: (a) accounts receivable $ 45,190 and (b) allowance for doubtful accounts $ 3,500. 3. Inventory costing $ 4,991 was shipped out on consignment on July 31, 2020. The ending inventory balance does not include the consigned goods. Receivables in the amount of $ 4,991 were recognized on these consigned goods. 4. Equipment had a cost of $ 113,190 and an accumulated depreciation balance of $ 29,190. 5. Income taxes payable of $ 6,000 were accrued on July 31. Stellar Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance but was offset against the income taxes payable amount. Prepare a corrected classified balance sheet as of July 31, 2020, from the available information, adjusting the account balances using the additional information. (List Current Assets in order of liquidity)

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter7: Fixed Assets, Natural Resources, And Intangible Assets

Section: Chapter Questions

Problem 7.3.4MBA

See similar textbooks

Related questions

Question

The bookkeeper for Stellar Company has prepared the following balance sheet as of July 31, 2020.

STELLAR COMPANY BALANCE SHEET AS OF JULY 31, 2020
Cash	$ 70,190	Notes and accounts payable	$ 45,190
Accounts receivable (net)	41,690	Long-term liabilities	76,190
Inventory	61,190	Stockholders’ equity	156,690
Equipment (net)	84,000		$ 278,070
Patents	21,000
	$ 278,070

The following additional information is provided.

1.		Cash includes $ 1,200 in a petty cash fund and $ 11,890 in a bond sinking fund.
2.		The net accounts receivable balance is comprised of the following two items: (a) accounts receivable $ 45,190 and (b) allowance for doubtful accounts $ 3,500.
3.		Inventory costing $ 4,991 was shipped out on consignment on July 31, 2020. The ending inventory balance does not include the consigned goods. Receivables in the amount of $ 4,991 were recognized on these consigned goods.
4.		Equipment had a cost of $ 113,190 and an accumulated depreciation balance of $ 29,190.
5.		Income taxes payable of $ 6,000 were accrued on July 31. Stellar Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance but was offset against the income taxes payable amount.

Prepare a corrected classified balance sheet as of July 31, 2020, from the available information, adjusting the account balances using the additional information. (List Current Assets in order of liquidity)

Assets
Current Assets
Cash
64,300
Accounts Receivable
40,199
Less v
Allowance for Doubtful Accounts
-3500
i
$36,699
Inventory
66,181
Total Current Assets
Long-term Investments
Bond Sinking Fund
Property, Plant and Equipment
Equipment
Less
Accumulated Depreciation-Equipment
%24
%24
%24

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here