Preparation of Balance sheet and computation of Retained Earnings.
From the following accounts and amounts prepare a balance sheet for the Prince Company for December 31, 2007. You must compute the amount for retained earnings to complete the balance sheet.
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Accounts Payable
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61,250
|
|
Accounts Receivable
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70,500
|
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Building
|
50,000
|
|
Capital Stock
|
50,000
|
|
Cash
|
64,000
|
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Equipment
|
30,000
|
|
Insurance Expense
|
5,000
|
|
Land
|
125,000
|
|
Notes Payable
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175,000
|
|
Sales Revenue
|
25,000
|
|
Salaries Expense
|
20,000
|
On April 30, 2007, the balance sheet of Japan Collectibles showed total assets of $800,000, total liabilities of $500,000, and owners' equity of $300,000. The following transactions occurred in May of 2007:
(1) Capital stock was issued in exchange for $175,000 cash.
(2) The business purchased equipment for $380,000, paying $180,000 cash and issuing a note payable for $200,000.
(3) The business paid off $80,000 of its accounts payable.
(4) The business collected $64,000 of its accounts receivable.