Problem - Listed below in random order are the items to be included in the balance sheet of Rocky Mountain Lodge at December 31, 2015:
Equipment......$ 39,200
Land..................425,000
Accounts Payable....54,800
Accounts Receivable....10,600
Salaries Payable......33,500
Interest Payable......12,000
Building...............$500,000
Capital Stock..........135,000
Cash..................31,400
Furnishings........58,700
Snowmobiles......15,400
Notes Payable.....620,000
Retained Earnings......?
Instructions
a. Prepare a balance sheet at December 31, 2015. Include a proper heading and organize your balance sheet similar to Exhibit 2-9. You will need to compute the amount to be shown for Retained Earnings.
b. Assume that no payment is due on the notes payable until 2017. Does this balance sheet indicate that the company is in a strong financial position as of December 31, 2015? Explain briefly.