Accounting, Analysis, and Principles Early in January 2018, Sandhill Company is

Question

Accounting, Analysis, and Principles

Early in January 2018, Sandhill Company is preparing for a meeting with its bankers to discuss a loan request. Its bookkeeper provided the following accounts and balances at December 31, 2017.

Except for the following items, Sandhill has recorded all adjustments in its accounts.

(a) Prepare a corrected December 31, 2017, balance sheet for Sandhill Company. (List Current Assets in order of liquidity. List Property, Plant and Equipment in order of Buildings and Equipment.)

Debit Credit Cash $ 68,840 Accounts Receivable (net) 41,680 Inventory 64,578 Equipment (net) 86,410 Patents 14,440 Notes and Accounts Payable $ 48,510 Notes Payable (due 2019) 70,270 Common Stock 93,700 Retained Earnings 63,468 $ 275,948 $ 275,948

Explanation / Answer

a)Cash Balance will Reduce by 540 Petty cash and 14200As Bond Sinking Fund

b)Accounts receivable increase by 14160 and simultaneously on the credit side Provision for Doubtful debts increase by 14160.

c) Accounts receivable balance and provision for doubtful debts balance reduced by 9040. Since the customer has went bank crupt.

307,508

Balance sheet January 2018

Particulars Debit Credit Equipment (net) 112,850 Accumulated Depreciation 26440 Patents 14,440 Current Assets on the basis of liquidity Inventory 64,578 Accounts Receivable (net) 46,800 Sinking Fund Investment 14,200 Cash 54,100 Petty Cash 540 Notes and Accounts Payable 48,510 Notes Payable (due 2019) 70,270 Common Stock 93,700 Retained Earnings 63,468 Provision For Doubtful Debts 5120 Total 307,508

307,508

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