Prepare a Balance Sheet
The following balance sheet was prepared by the bookkeeper for Brown Company as of December
as of December 31, 2007
Cash $ 80,000 Accounts payable $ 75,000
Accounts receivable (net) 52,200 Long-term liabilities 100,000
Inventories 57,000 Stockholders' equity 218,500
Equipment (net) 96,000
The following additional information is provided:
1. Cash includes the cash surrender value of a life insurance policy $12,000, and a bank overdraft of $2,500 has been deducted.
2. The net accounts receivable balance includes:
(a) accounts receivable-debit balances $60,000;
(b) accounts receivable-credit balances $4,000;
(c) allowance for doubtful accounts $3,800.
3. Inventories do not include goods costing $3,000 shipped out on consignment. Receivables of $3,000 were recorded on these goods.
4. Investments include investments in common stock, trading $13,000 and available-for-sale $48,300, and franchises $15,000.
5. Equipment costing $5,000 with accumulated depreciation $4,000 is no longer used and is held for sale. Accumulated depreciation on the other equipment is $40,000.
Prepare a balance sheet in good form (stockholders' equity details can be omitted.)