Question

3. Katy Manufacturing Co's adjusted trial balance for the year 2 * adjusted trial balance for the year 2020 is given below. Cash and Cash Equivalents Accounts Receivable Allowance for Doubtful Accounts Sales Revenue Prepaid Expenses Inventory - Finished Goods Equipment Accumulated Depreciation - Equipment Administrative Expenses Accounts Payable Short-Term Notes Payable Income Taxes Payable Additional Paid-In Capital Retained Earnings Rent Expenses Interest Expense Salaries Expenses Treasury Stock Long-Term Debt Common Stock Income Tax Expense Cost of Goods Sold 18,500 23,500 2,000 127,500 3,500 36,500 47,500 7,500 16,800 20,000 6,700 8,300 9,000 29,000 2,400 1,400 9,400 1,000 25,000 23,000 5,000 82,500 Required: Prepare a balance sheet in good format for December 31, 2020.

Answer 1

Balance sheet is one of the part of financial statement.

Balance sheet consist of assets and liabilities.

Assets
Current asset
cash		$18,500
accounts receivable	$23,500
Less: allowance for doubtful account	($2,000)	$21,500
Prepaid expense		$3,500
Inventory		$36,500
Plant, property and equipment
Equipment	$47,500
Less: Accumulated depreciation	($7,500)	$40,000
Total Assets			$120,000 ($18,500+$21,500+$3,500+$36,500+$40,000)
Liabilities and shareholder's equity
Current liability
Accounts Payable		$20,000
Short term Note payable		$6,700
Income tax payable		$8,300
Total Liabilities
Long term Debt
Long term debt		$25,000
Total liabilities			$60,000
Shareholder's equity
Common stock		$23,000
Additional Paid in capital		$9,000
Retained earnings		$29,000
Less: treasury stock		($1,000)	$60,000
Total liabilities and shareholder's equity			$120,000 ($60,000+$60,000)

Hint : Total liabilities + shareholder 's equity = Total assets