I need to do a balance sheet for the below account balances. I don\'t understand
ID: 2672119 • Letter: I
Question
I need to do a balance sheet for the below account balances. I don't understand what it means to balance it. I put them in separate columns of assets and liabilities but I'm still confused. I need to know what the total net assets (net income) of theses figures and how I arrived at it. I have 4 choices:
A. $1,200,000
B. $5,800,000
C. $1,460,000
D. none of above
Gross Plant & Equipment 6,000,000
Accounts payable 130,000
Inventories 100,000
Other Current liabilities 70,000
net accounts receivable 650,000
accrued expenses 100,000
accumulated depreciation 200,000
long term debt 5,000,000
cash 210,000
Explanation / Answer
Assets: Gross Plant & Equipment 6,000,000(minus accumulated depreciation 200,000) Inventories 100,000 net accounts receivable 650,000 cash 210,000 Total Assets= 6,760,000 Liabilities: Accounts payable 130,000 Other Current liabilities 70,000 accrued expenses 100,000 long term debt 5,000,000 Total Liabilities= 5,300,000 net income = Total Assets-Total Liabilities=$1,460,000 (Hence C is the answer)