The following is the balance sheet of Korver Supply Company at December 31, 2020 (prior year). KORVER
Question:
The following is the balance sheet of Korver Supply Company at December 31, 2020 (prior year).
KORVER SUPPLY COMPANY
Balance Sheet
At December 31, 2020
Assets
Cash$160,000
Accounts receivable 320,000
Inventory 270,000
Furniture and fixtures (net) 180,000
Total assets$930,000
Liabilities and Shareholders’ Equity
Accounts payable (for merchandise)$270,000
Notes payable 280,000
Interest payable 7,000
Common stock 110,000
Retained earnings 263,000
Total liabilities and shareholders’ equity$930,000
Transactions during 2021 (current year) were as follows:
1.Sales to customers on account$930,000
2.Cash collected from customers 910,000
3.Purchase of merchandise on account 620,000
4.Cash payment to suppliers 630,000
5.Cost of merchandise sold 570,000
6.Cash paid for operating expenses 290,000
7.Cash paid for interest on notes 14,000
Additional Information:
The notes payable are dated June 30, 2020, and are due on June 30, 2022. Interest at 5% is payable annually on June 30. Depreciation on the furniture and fixtures for 2021 is $33,000. The furniture and fixtures originally cost $430,000.
Required:
Prepare a classified balance sheet at December 31, 2021, by updating ending balances from 2020 for transactions during 2021 and the additional information. The cost of furniture and fixtures and their accumulated depreciation are shown separately. (Amounts to be deducted should be indicated by a minus sign.)
Expert Answer:
To prepare the classified balance sheet at December 31 2021 for Korver Supply Company we need to update the ending balances from 2020 for transactions ... View the full answer
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
