Complete Question:
At December 31, 2018, Thompson Products has cash of $23,000. receivables of $15,000, and inventory of $78,000. The company's equipment totals $181.000. Thompson owes accounts payable of $20,000 and long-term notes payable of $174,000. Common stock is $33.500. Read the requirement. Start with the heading and then complete the assets section of the statement. Finally complete the liabilities and stockholders' equity section of the statement. (Classify the balance sheet by selecting the proper title on all applicable subtotal lines. In the first part complete the assets section of the balance sheet. In the second part complete the liabilities and stockholders' equity section of the balance sheet. If a box is not used in the table leave the box empty: do not select a label or enter a zero.)
Answer:
Thompson Products
Thompson Products
Classified Balance Sheet
As of December 31, 2018:
Assets
Current Assets:
Cash $23,000
Account receivables 15,000
Inventory 78,000
Total current assets $116,000
Non-Current Assets:
Equipment $181,000
Total assets $297,000
Liabilities + Equity
Liabilities
Current Liabilities:
Accounts payable $20,000
Long-term Liabilities:
Long-term notes payable $174,000
Total liabilities $194,000
Equity:
Common stock $33,500
Retained earnings 69,500 $103,000
Total liabilities + equity $297,000
Explanation:
a) Data and Calculations:
Cash $23,000
Account receivables $15,000
Inventory $78,000
Equipment $181,000
Total assets $287,000
Accounts payable $20,000
Long-term notes payable $174,000
Common stock $33,500
Retained earnings (missing) $69,500
Total Liabilities + Equity $297,000
b) Typically, a balance sheet is classified into Assets, Liabilities, and Owners' Equity in accordance with the accounting equation. Each category is made up of current and non-current, with the exception of the owners' equity, which is made up of owners' capital and retained earnings. According to the accounting equation, assets = liabilities + equity. And this equation holds true for each business transaction.
