Question

The following balance sheet was prepared by the bookkeeper for Jacuzi Company as of December 31, 2017. Jacuzi Company Balance Sheet as of December 31, 2017 Cash $ 80,000 Accounts payable $ 75,000 Accounts receivable (net) 52,200 Bonds payable 100,000 Inventory 57,000 Stockholders' equity 218,500 Investments 76,300 Equipment (net) 96,000 Patents 32,000 $393,500 $393,500 The following additional information is provided: 1. Cash includes the cash surrender value of a life insurance policy $9,400, a bank overdraft of $2,500 has been deducted. Cash also includes petty cash of $725. 2. The net accounts receivable balance includes: (a) accounts receivable—debit balances $60,000 from normal sales to customers; (b) accounts receivable—credit balances $4,000 for sales returns by customers; (c) allowance for doubtful accounts $3,800. 3. Inventory does not include goods costing $3,000 shipped out on consignment. Accounts receivables of $3,000 were recorded on the goods that were consigned.. 4. Investments include common stock of Ford Motor Company $19,000, vacant land held for future use $48,300, and “goodwill” of $9,000. 5. Equipment costing $5,000 with accumulated depreciation $5,000 is still being used by the company. Accumulated depreciation on the remaining equipment is $40,000. 6. Stockholders’ equity consists of Common Stock $150,000, Retained Earnings of $80,400 and Treasury Stock of $11,900. Required Prepare a corrected “classified” balance sheet in good form.

Answer 1

	BALANCE SHEET OF JACUZI COMPANY AS AT DEC.31, 2017
						(IN $)
	LIABILITIES	AMOUNT	AMOUNT	ASSETS	AMOUNT	AMOUNT
	STOCKHOLDER'S EQUITY			FIXED ASSETS
	COMMON STOCK	150000		EQUIPMENT:
	RETAINED EARNING	80400		COST	141000
	TREASURY STOCK	-11900	218500	LESS: ACCUMULATED DEPRECIATION	-45000	96000
	BOND PAYABLE		100000	PATENT		32000
	CURRENT LIABILITIES			INVESTMENT
	ACCOUNT PAYABLE	75000		COMMON STOCK OF FORD MOTOR COMPANY	19000
	BANK OVERDRAFT	2500	77500	LAND	48300
				GOODWILL	9000	76300
				CURRENT ASSETS
				ACCOUNT RECEVABLES:
				GROSS SALES	60000
				LEES: SALES RETURN	-4000
				LEES: SENT ON CONSINMENT	-3000
				ACCOUNT RECEVABLES	53000
				LESS: DOUBTFUL DEBTS	-3800	49200
				INVENTORY:
				IN HANDS	57000
				SENT ON CONSINMENT	3000	60000
				CASH ACCOUNT:
				CASH	72374.8
				LIC	9400
				PETTY CASH	725.2	82500
			396000			396000