Prepare a corrected classified balance sheet as of july 31

Question

Questions -

Q1. Presented below are selected amounts from the records of McGraw Corporation as of December 31, 2012.

Cash	$62,100
Administrative expenses	102,000
Selling expenses	83,900
Net sales	552,400
Cost of goods sold	263,200
Cash dividends declared (2012)	20,800
Cash dividends paid (2012)	19,000
Discontinued operations (loss before income taxes)	41,900
Depreciation expense, not recorded in 2011	30,100
Retained earnings, December 31, 2011	90,900
Effective tax rate	30%

(a) Compute net income for 2012.

Q2. The bookkeeper for Garfield Company has prepared the following balance sheet as of July 31, 2012.

GARFIELD COMPANY BALANCE SHEET AS OF JULY 31, 2012
Cash	$ 73,870	Notes payable	45,380
Accounts receivable (net)	41,880	Long-term liabilities	79,870
Inventory	64,870	Stockholders' equity	160,370
Equipment (net)	84,000		$285,620
Patents	21,000
	$285,620

The following additional information is provided.

1. Cash includes $1,200 in a petty cash fund and $12,400 in a bond sinking fund.

2. The net accounts receivable balance is comprised of the following three items: (a) accounts receivable-debit balances $53,380; (b) accounts receivable-credit balances $8,000; (c) allowance for doubtful accounts $3,500.

3. Merchandise inventory costing $5,600 was shipped out on consignment on July 31, 2012. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,600 were recognized on these consigned goods.

4. Equipment had a cost of $113,380 and an accumulated depreciation balance of $29,380.

5. Taxes payable of $9,010 were accrued on July 31. Garfield Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset against the taxes payable amount.

Prepare a corrected classified balance sheet as of July 31, 2012, from the available information, adjusting the account balances using the additional information.