Exercise 1-13 Robyn Howser is the bookkeeper for Madison Company. Robyn has been
ID: 2401057 • Letter: E
Question
Exercise 1-13 Robyn Howser is the bookkeeper for Madison Company. Robyn has been trying to determine the correct balance sheet for Madison Company. Madison's balance sheet is shown below. MADISON COMPANY Balance Sheet December 31, 2017 Assets Liabilities Cash Supplies Equipment Dividends $28,400 62,640 Total assets 103,820 Total liabilities and stockholders' equity $103,820 $19,880 Accounts payable 3,000 Accounts receivable 68,160 Common stock 12,780 Retained earnings (12,070 ) Prepare a correct balance sheet. (List Assets in order of liquidity.)Explanation / Answer
MADISON COMPANY
Balance Sheet
December 31 2017
Assets
Current Assets
Cash
$ 19,880.00
Supplies
$ 3,000.00
Accounts Receivables
$ 12,070.00
Dividends
$ 12,780.00
Total Current Assets
$ 47,730.00
Equipment
$ 68,160.00
Total Assets
$ 115,890.00
Liabilities
Current Liabilities
Accounts Payable
$ 28,400.00
Total Current liabilities
$ 28,400.00
Total Liabilities
$ 28,400.00
Shareholder's Equity
Common Stock
$ 62,640.00
Retained Earnings
$ 24,850.00
Total Shareholder's Equity
$ 87,490.00
Total Liabilities and Shareholder's Equity
$ 115,890.00
Note : Part 1 of Balance sheet that is Total Assets, is incorrect. Accounts receivables are not shown at asset side. The above balance sheet correctly places the balance of accounts receivables on the asset side of the balance sheet.
MADISON COMPANY
Balance Sheet
December 31 2017
Assets
Current Assets
Cash
$ 19,880.00
Supplies
$ 3,000.00
Accounts Receivables
$ 12,070.00
Dividends
$ 12,780.00
Total Current Assets
$ 47,730.00
Equipment
$ 68,160.00
Total Assets
$ 115,890.00
Liabilities
Current Liabilities
Accounts Payable
$ 28,400.00
Total Current liabilities
$ 28,400.00
Total Liabilities
$ 28,400.00
Shareholder's Equity
Common Stock
$ 62,640.00
Retained Earnings
$ 24,850.00
Total Shareholder's Equity
$ 87,490.00
Total Liabilities and Shareholder's Equity
$ 115,890.00
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