Question

20. XYZ Merchandising uses a periodic inventory system. The balance in the inventory account on 12/31/19 is $230,000. They report the following accounts and balances on 12/31/19: Debit Credit Cash $109,000 Account Receivable 92,000 Allowance for Doubtful Accounts 1,000 Inventory balance on 1/1/19 223,000 Purchases 310,000 Equipment 115,000 Accumulated Depreciation 20,000 Account Payable 95,000 Common Stock 90,000 Retained Earnings 1/1/19 290,000 Sale Revenue 390,000 Operating Expenses 37,000 Additional Information: The business has not recorded the annual depreciation for 2019 or an estimate for uncollectible accounts in 2019. The annual depreciation for the equipment is $10,000. They estimate that 2% of the receivables will not be collected. Prepare a balance sheet for XYZ Merchandising as of 12/31/19

Answer 1

Balance Sheet
Assets
Current Assets
Cash		$         109,000
Accounts Receivable	$           92,000
Less Allowance for Doubtful Accounts	$            (1,840)
Accounts Receivable, net		$           90,160
Inventory		$         230,000
Total Current Assets			$       429,160
Property Plant and Equipment
Equipment		$         115,000
Less : Accumulated Depreciation		$          (30,000)
Total Property Plant and Equipment			$         85,000
Total Assets			$       514,160
Liabilities & Stockholder's Equity
Current Liabilities
Accounts Payable		$           95,000
Total Current Liabilities			$         95,000
Stockholder's Equity
Common Stock		$           90,000
Retained Earnings		$         329,160
Total Stockholder's Equity			$       419,160
Total Liabilities & Stockholder's Equity			$       514,160