E5-6. (Corrections
of a Balance Sheet)
E5-6 The
bookkeeper for Geronimo Company has prepared the following balance sheet as of
July 31, 2014.
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The following
additional information is provided.
1. Cash includes
$1,200 in a petty cash fund and $15,000 in a bond sinking fund.
2. The net
accounts receivable balance is comprised of the following two items: (a)
accounts receivable $44,000 and (b) allowance for doubtful accounts $3,500.
3. Inventory
costing $5,300 was shipped out on consignment on July 31, 2014. The ending
inventory balance does not include the consigned goods. Receivables in the
amount of $5,300 were recognized on these consigned goods.
4. Equipment had
a cost of $112,000 and an accumulated depreciation balance of $28,000.
5. Income taxes
payable of $6,000 were accrued on July 31. Geronimo Company, however, had
set up a cash fund to meet this obligation. This cash fund was not included in
the cash balance but was offset against the income taxes payable amount.
Instructions
Prepare a
corrected classified balance sheet as of July 31, 2014, from the available
information, adjusting the account balances using the additional information.
TUTORIAL PREVIEW
Geronimo Company
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Balance Sheet
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July 31, 2014
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Assets
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Current assets
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Cash
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$60,000*
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Accounts receivable
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$38,700**
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Less: Allowance for doubtful accounts
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3,500
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35,200
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