Organic Floral is an organic flower shop. After its first quarter of operations,
ID: 2416020 • Letter: O
Question
Organic Floral is an organic flower shop. After its first quarter of operations, the company’s accountant prepared the following trial balance, in alphabetical order. The accountant also tells you that net income for the quarter was $35,000.
Use the trial balance along with the net income information to prepare a balance sheet for Organic Floral.
Debits
Credits
Accounts payable
$4,600
Accounts receivable
$400
Bank loan for van
26,400
Cash
26,000
Common stock
2,000
Cost of goods sold
24,000
Delivery van
36,000
Gas for van
1,000
Tax expense
4,000
Insurance expense
2,000
Inventory
7,600
Prepaid insurance
2,000
Rent expense
3,000
Salaries expense
16,000
Sales
85,000
Taxes payable
4,000
Total
$122,000
$122,000
Debits
Credits
Accounts payable
$4,600
Accounts receivable
$400
Bank loan for van
26,400
Cash
26,000
Common stock
2,000
Cost of goods sold
24,000
Delivery van
36,000
Gas for van
1,000
Tax expense
4,000
Insurance expense
2,000
Inventory
7,600
Prepaid insurance
2,000
Rent expense
3,000
Salaries expense
16,000
Sales
85,000
Taxes payable
4,000
Total
$122,000
$122,000
Explanation / Answer
Balance Sheet Liabilities Amount $ Assets Amount $ Shareholder Funds Fixed Assets Common Stock 2,000 Delivery van 36,000 Reserve and Surplus Retained Earning - Add: net Profit 35,000 35,000 Current Assets Inventory 7,600 Loans Accounts Receivable 400 Bank Loan for Van 26,400 Cash 26,000 34,000 Current Liabilities Accounts Payable 4,600 Other Current assets Prepaid Insurance 2,000 Provisions Taxes payable 4,000 72,000 72,000
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