P2. Use your knowledge of balance sheets to fill in the missing amounts:
Assets:
CASH - $10,000
ACCOUNTS RECEIVABLE - $100,000
INVENTORY - $------
TOTAL CURRENT ASSETS – $220,000
GROSS PLANT AND EQUIPMENT – $500,000
LESS: ACCUMULATED DEPRECIATION -$ ------
NET PLANT AND EQUIPMENT – $375,000
TOTAL ASSETS - $------
Liabilities:
ACCOUNTS PAYABLE - $12,000
NOTES PAYABLE - $50,000
TOTAL CURRENT LIABILITIES - $------
LONG-TERM DEBT - $------
TOTAL LIABILITIES - $190,000
COMMON STOCK ($1 per 100,000 shares) -$ ------
PAID-IN CAPITAL - $------
RETAINED EARNINGS - $150,000
TOTAL STOCKHOLDERS’ EQUITY - $------
TOTAL LIABILITIES AND EQUITY - $------
To fill in the missing amounts in the balance sheet, let's break it down and identify the missing values step by step:
1. Start with the Assets section:
a. CASH - Given as $10,000.
b. ACCOUNTS RECEIVABLE - Given as $100,000.
c. INVENTORY - Missing.
d. TOTAL CURRENT ASSETS - Given as $220,000.
To find the missing value for INVENTORY, we can rearrange the equation:
INVENTORY = TOTAL CURRENT ASSETS - CASH - ACCOUNTS RECEIVABLE
INVENTORY = $220,000 - $10,000 - $100,000
INVENTORY = $110,000
2. Moving on to the Gross Plant and Equipment section:
a. GROSS PLANT AND EQUIPMENT - Given as $500,000.
b. LESS: ACCUMULATED DEPRECIATION - Missing.
c. NET PLANT AND EQUIPMENT - Given as $375,000.
To find the missing value for ACCUMULATED DEPRECIATION, we can rearrange the equation:
ACCUMULATED DEPRECIATION = GROSS PLANT AND EQUIPMENT - NET PLANT AND EQUIPMENT
ACCUMULATED DEPRECIATION = $500,000 - $375,000
ACCUMULATED DEPRECIATION = $125,000
3. Moving on to the Total Assets section:
a. TOTAL ASSETS - Missing.
To find the missing value for TOTAL ASSETS, we can sum up all the known asset values:
TOTAL ASSETS = CASH + ACCOUNTS RECEIVABLE + INVENTORY + NET PLANT AND EQUIPMENT
TOTAL ASSETS = $10,000 + $100,000 + $110,000 + $375,000
TOTAL ASSETS = $595,000
4. Moving on to the Liabilities section:
a. ACCOUNTS PAYABLE - Given as $12,000.
b. NOTES PAYABLE - Given as $50,000.
c. TOTAL CURRENT LIABILITIES - Missing.
d. LONG-TERM DEBT - Missing.
e. TOTAL LIABILITIES - Given as $190,000.
To find the missing value for TOTAL CURRENT LIABILITIES, we can sum up the known current liability values:
TOTAL CURRENT LIABILITIES = ACCOUNTS PAYABLE + NOTES PAYABLE
TOTAL CURRENT LIABILITIES = $12,000 + $50,000
TOTAL CURRENT LIABILITIES = $62,000
5. To find the missing value for LONG-TERM DEBT, we can rearrange the equation:
LONG-TERM DEBT = TOTAL LIABILITIES - TOTAL CURRENT LIABILITIES
LONG-TERM DEBT = $190,000 - $62,000
LONG-TERM DEBT = $128,000
6. Moving on to the Stockholders' Equity section:
a. COMMON STOCK ($1 per 100,000 shares) - Missing.
b. PAID-IN CAPITAL - Missing.
c. RETAINED EARNINGS - Given as $150,000.
d. TOTAL STOCKHOLDERS’ EQUITY - Missing.
e. TOTAL LIABILITIES AND EQUITY - Missing.
To find the missing value for COMMON STOCK, we need to calculate the number of shares issued:
Number of shares = Common Stock Value / Par Value
Number of shares = COMMON STOCK / $1
Number of shares = COMMON STOCK
Since the number of shares is missing, we cannot determine the value of COMMON STOCK without additional information.
Similarly, since PAID-IN CAPITAL is missing, we cannot determine its value.
To find the missing value for TOTAL STOCKHOLDERS' EQUITY, we can rearrange the equation:
TOTAL STOCKHOLDERS’ EQUITY = COMMON STOCK + PAID-IN CAPITAL + RETAINED EARNINGS
TOTAL STOCKHOLDERS’ EQUITY = COMMON STOCK + PAID-IN CAPITAL + $150,000
Finally, to find the missing value for TOTAL LIABILITIES AND EQUITY, we can add up the known liabilities and stockholders' equity:
TOTAL LIABILITIES AND EQUITY = TOTAL LIABILITIES + TOTAL STOCKHOLDERS’ EQUITY
TOTAL LIABILITIES AND EQUITY = $190,000 + (COMMON STOCK + PAID-IN CAPITAL + $150,000)
Since we don't have enough information to determine the values of COMMON STOCK and PAID-IN CAPITAL, we cannot calculate the missing values for TOTAL STOCKHOLDERS' EQUITY and TOTAL LIABILITIES AND EQUITY.