Preparing a Balance Sheet and Analyzing Some of Its Parts
TangoCo is developing its annual financial statements for 2012. The following amounts were correct at December 31, 2012: cash, $48,800; investment in stock of PIL Corporation (long-term), $36,400; store equipment, $67,200; accounts receivable, $71,820; inventory, $154,000; prepaid rent, $1,120; used store equipment held for disposal, $9,800; accumulated depreciation, store equipment, $13,440; income taxes payable, $9,800; long-term note payable, $32,000; accounts payable, $58,800; retained earnings, $165,100; and common stock, 100,000 shares outstanding, par value $1 per share (originally sold and issued at $1.10 per share).
Required:
1. Based on these data, prepare a 2012 balance sheet. Use the following major captions (list the individual items under these captions):
a. Assets: Current Assets, Long-Term Investments, Fixed Assets, and Other Assets.
b. Liabilities: Current Liabilities and Long-Term Liabilities.
c. Stockholdersâ Equity: Contributed Capital and Retained Earnings.
2. What is the net book value of the store equipment? Explain what this value means.
TangoCo is developing its annual financial statements for 2012. The following amounts were correct at December 31, 2012: cash, $48,800; investment in stock of PIL Corporation (long-term), $36,400; store equipment, $67,200; accounts receivable, $71,820; inventory, $154,000; prepaid rent, $1,120; used store equipment held for disposal, $9,800; accumulated depreciation, store equipment, $13,440; income taxes payable, $9,800; long-term note payable, $32,000; accounts payable, $58,800; retained earnings, $165,100; and common stock, 100,000 shares outstanding, par value $1 per share (originally sold and issued at $1.10 per share).
Required:
1. Based on these data, prepare a 2012 balance sheet. Use the following major captions (list the individual items under these captions):
a. Assets: Current Assets, Long-Term Investments, Fixed Assets, and Other Assets.
b. Liabilities: Current Liabilities and Long-Term Liabilities.
c. Stockholdersâ Equity: Contributed Capital and Retained Earnings.
2. What is the net book value of the store equipment? Explain what this value means.
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