Problem:
Joe’s Bike shop
Balance Sheet
As of December 31, 2008
Assets
Current Assets:
Cash $15,000
Merchandise Inventory $30,000
Merchandise Sold, at cost $37,500
Prepaid Insurance $1,000
Advanced From customer $(1,000)
Total Current Assets $82,500
Property, Plant, and equipment:
Equipment $8,000
Less Note payable $(5,000)
Total assets $85,500
Liabilities and Shareholders' equity
Current Liabilities
Bike Sales $55,000
A/P $2,000
Accumulated Depreciation $700
Rent payable $1,000
Total Current Liabilities $58,700
Shareholders' Equity
Common stock 1,000 shares at $10 par value $10,000
Additional Paid-in Capital $7,500
Retained Earnings $9,300
Total shareholders equity $26,800
Total liabilities and shareholders equity $85,500
Do a corrected balance sheet for Joe’s shop