LO2-4 PROBLEM 2.6A Preparing a Balance Sheet-A Second Problem changes would be required in your June 30 balance sheet lo relect the US UIT The following list of balance sheet items are in random order for Alexander Farms, Inc., at September 30, current year. Land ..... A Barns and Sheds ............ Notes Payable................ Accounts Receivable .......... A Citrus Trees .................. L Accounts Payable............. L Property Taxes Payable ........ Of Capital Stock ..... $490,000 A Fences and Gates ........ 78,300 A Irrigation System .... 330.000 A Cash ....... 22,365 Livestock .............. 76,650 A Farm Machinery .......... 77,095 D Retained Earnings ........ 9.135 Wages Payable ........... 290,000 $ 33,570 20.125 16,710 120.780 42,970 5,820 Instructions a. Prepare a balance sheet by using these items and computing the amount for Retained Earn- ings. Use a sequence of assets similar to that illustrated in Exhibit 2-10. (After "Barns and Sheds," you may list the remaining assets in any order.) Include a proper heading for your bal ance sheet. b. Assume that on September 30, immediately after this balance sheet was prepared, a tornado completely destroyed one of the barns. This barn had a cost of $14,000 and was not insured against this type of disaster. Explain what changes would be required in your September 30 balance sheet to reflect the loss of this barn. ISE 2.8 of Business ation Spencer Software Company has assets of $1.020,000 and liabilities of $552,000. a. Prepare the owners' equity section of the company's balance sheet under each of the following independent assumptions: 1. The business is organized as a sole proprietorship, owned by Johanna Spencer. 2. The business is organized as a partnership, owned by Johanna Spencer and Mikki Yato. Spencer's equity amounts to $288,000. 3. The business is a corporation with 27 stockholders, each of whom originally invested $12,000 in exchange for shares of the company's capital stock. The remainder of the stockholders' equity has resulted from profitable operation of the business. b. Assume that you are a loan officer at Security Bank. Spencer Software Company has applied to your bank for a large loan to finance the development of new products. Does it matter to you whether Spencer is organized as a sole proprietorship, a partner ship, or a corporation? Explain