Question

These items are taken from the financial statements of Carla Vista Ltd. at December 31, 2018: Accounts payable Accounts receivable Accumulated depreciation-buildings 54,600 and Accumulated depreciation-equipment 23,470 Long-term investments Service revenue Buildings Cash Common shares Equipment Income tax expense $5,900 2,200 188,670 32,970 107,000 162,680 1,700 144,000 Retained earnings, January1 119,520 1,540 $19,050 Interest expense 19,780 Interest payable 182,040 Mortgage payable 136,800 Operating expenses 27,040 Prepaid insurance 68,100 Supplies 6,700

Assume that $30,500 of the mortgage payable will be paid in 2019.

Hi, can you help me solve this question?

Answer 1

Answer

• You have shown incorrect answer under Liabilities and Shareholder’s equity section, so first that section is provided correctly below. ASSET section is provided after that.
• Correct figures:

LIABILITIES
Current Liabilities:
Accounts Payable	$                19,050
Interest Payable	$                   2,200
Mortgage Payable (short term = payable next year in 2019)	$                30,500
Total current Liabilities		$               51,750
Mortgage Payable (long Term = $ 107000 - $ 30500 payable in 2019)		$               76,500
Total Liabilities		$             128,250
STOCKHOLDER's EQUITY
Common Stock	$              144,000
Retained earnings [already calculated correctly]	$              126,280
Total shareholder's Equity		$             270,280
Total Liabilities & Equity		$             398,530

ASSETS
Current Assets:
Cash	$              27,040
Accounts receivables	$              19,780
Prepaid Insurance	$                1,700
Supplies	$                1,540
Total Current Assets		$                     50,060
Property Plant Equipment:
Land		$                   188,670
Building	$            136,800
Accumulated Dep - Building	$            (54,600)	$                     82,200
Equipment	$              68,100
Accumulated Dep - Equipment	$            (23,470)	$                     44,630
Total PPE		$                   315,500
Investments		$                     32,970
Total Assets		$                   398,530