I. The following balance sheet has been given to you to review. Required: List a
ID: 2502413 • Letter: I
Question
I. The following balance sheet has been given to you to review.
Required:
List any corrections that need to be made. Errors can be in classification, lack of disclosure, format, or terminology.
Eldorado, Inc.
Balance Sheet
For the Year Ended June 30, 2012
Assets
Current Assets:
Accounts Receivable
$ 37,000
Merchandise Inventory
62,000
Cash
17,000
$116,000
Investments:
Marketable Securities
$ 18,000
Treasury Stock
4,000
22,000
Tangible Assets:
Buildings
$194,000
Less: Reserve for Depreciation
(34,000)
160,000
Other Assets:
Unamortized Portion of Bond Payable Discount
3,000
$301,000
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable
$ 26,000
Bank Note Payable (due 6/1/2011)
22,000
$ 48,000
Long-Term Liabilities:
Bonds Payable
112,000
Capital Stock:
Common Stock
$ 49,000
Earned Surplus
92,000
141,000
$301,000
Eldorado, Inc.
Balance Sheet
For the Year Ended June 30, 2012
Assets
Current Assets:
Accounts Receivable
$ 37,000
Merchandise Inventory
62,000
Cash
17,000
$116,000
Investments:
Marketable Securities
$ 18,000
Treasury Stock
4,000
22,000
Tangible Assets:
Buildings
$194,000
Less: Reserve for Depreciation
(34,000)
160,000
Other Assets:
Unamortized Portion of Bond Payable Discount
3,000
$301,000
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable
$ 26,000
Bank Note Payable (due 6/1/2011)
22,000
$ 48,000
Long-Term Liabilities:
Bonds Payable
112,000
Capital Stock:
Common Stock
$ 49,000
Earned Surplus
92,000
141,000
$301,000
Explanation / Answer
Balance sheet:
The balance sheet is the statement showing assets and claims to assets for a particular period of time. The claims to assets can be splits to two parts that is clams of owners and claims of creditors. Claims of creditors are called as liabilities and the claims of owners are called as stockholders equity.
Treasury stock:
The term treasury itself indicates the safe custody of the stocks. Hence the treasury stocks are kind of stocks that which is issued once to the stock holders from the corporation