The owner of Delton Property Rentals, Teal Delton, has requested an emergency meeting with you, a representative from the bank. ?Our accountant has been on leave for the past several months and her replacement has resigned suddenly. I?m told we can?t pay our employees this month and your bank won?t lend us any money. I don?t understand. We have lots of assets that can be used to pay expenses, as you can see from our balance sheet.?

You explain to Mr. Delton that you will need to obtain some additional information. He faxes you the following:

Required

Using the elements of critical thinking described on the inside front cover, outline how you will respond to Teal Delton.

Transcribed Image Text:

Delton Property Rentals Balance Sheet March 31 2020 2019 Assets.. Liabilities. $750,000 $2,850,000 2,780,000 Equity. 510,000 70,000 Delton Property Rentals Post-Closing Trlal Balance March 31 2020 2019 Accounts payable $ 340,000 $ 7,000 Accounts receivable. 75,000 215,000 Accumulated depreciation, buildings. 165,000 150,000 Accumulated depreciation, equipment. 35,000 30,000 430,000 40,000 Buildings.. 2,112,000 Cash. 15,000 ....... Equipment. 45,000 45,000 Land. 675,000 150,000 Notes payable". Notes receivable, due Nov. 30, 2021 2,440,000 204,000 120,000 -0- Supplies. 8,000 50,000 Teal Delton, capital“. 70,000 510,000 Unearned revenue. -0- 29,000 ... ... "$200,000 principal is due annually each February 1. *"No withdrawals were made during 2019 or 2020.