Supply missing balance sheet numbers
The bookkeeper for Lowell's Country Music Bar left this incomplete balance sheet. Lowell's
working capital is $90,000 and its debt to assets ratio is 40 percent.
Assets
Current assets Cash. $ 21,000
Accounts receivable Inventory 42,000
Inventory (A)
Prepaid expenses 9,000
Total current assets (B)
Long-term assets
Building (C)
Less: Accumulated depreciation (39,000)
Total long-term assets 210,000
Total assets (D)
Liabilities and Stockholders' Equity
Liabilities.
Current liabilities
Accounts payable $ (E)
Notes payable 12,000
Income tax payable. 10,500
Total current liabilities 37,500
Long-term liabilities
Mortgage payable (F)
Total liabilities. (G )
Stockholders' equity
Common stock 105,000
Retained earnings. (H)
Total stockholders' equity. (I)
Total liabilities and stockholders' equity (J)
Complete the balance sheet by supplying the missing amounts.
Why are externally presented reports required to be prepared according to generally accepted accounting principles while internally presented managerial accounting reports are not?
Case Analysis
How can a misstatement in one financial statement, whether intentional or not, affect a presentation in another financial statement? Give an example of an error that occurs on one financial statement and the error flows through to a second financial statement.