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7-12 Accounting [CH 7
Figure 7.7 Balance Sheet for Sierra Quality Canner
Sierra Quality Canner
426 N. 7th St.
Sacramento, California 95814
SIERRA QUALITY CANNER
Balance Sheet
as of December 31, 20XX
ASSETS
Current Assets
Cash $ 6,000
Accounts Receivable $ 75,000
Less: Allowance for
Doubtful Accounts 4,000 71,000
Notes Receivable 22,000
Inventory for Sale 66,000
Prepaid Expenses 12,000
Total Current Assets $ 177,000
Working Assets
Processing Equipment $ 75,000
Less: Accumulated Depreciation 15,000 $ 60,000
Furniture and Fixtures $ 19,000
Less: Accumulated Deprecation 4,000 15,000
Total Working Assets $ 75,000
Fixed Assets
Land $ 60,000
Buildings and Improvements $ 295,000
Less: Accumulated Depreciation 45,000 245,000
Total Fixed Assets 310,000
Total Assets $ 562,000
LIABILITIES AND OWNERS' EQUITY
Current Liabilities
Accounts Payable $ 40,000
Current Installments of Long-Term Debt 15,000
Accrued Expenses 7,000
Income Taxes Payable 7,000
Total Current Liabilities $ 69,000
Long-Term Liabilities
Long-Term Notes Payable $ 30,000
Mortgages Payable 260,000
Total Long-Term Liabilities $ 290,000
Total Liabilities $ 359,000
Owners' Equity
Common Stock $ 122,000
Retained Earnings 81,000
Total Owners' Equity $ 203,000
Total Liabilities and Owners’ Equity $ 562,000
reason being is how they are acquired for use in the farming operation. These animals
may be acquired by purchase or by raising on the farm. How they are valued and
carried as assets will differ.
Fixed Assets. ($310,000) Relatively permanent assets that are expected to be used
fixed assets
Relatively permanent assets in the operation of the firm are considered fixed (or plant) assets. Included in this
expected to be used for category of long‑term assets are land, buildings and improvements to the land.
periods longer than one
year. Both working and fixed assets, with the exception of land, are considered
depreciable assets since they wear out over time from use or age and must eventually
depreciation be replaced. The cost of this usage for valuable assets is reflected on the balance sheet
Noncash expense involving
the allocation of the cost of with the notation of depreciation. Depreciation, is to be a saving up for the
an asset over the years in replacement cost of the asset when it is worn out. Allegedly this accumulation and
which it is used. replacement is from the deprecation taken (an income tax savings plan) and selling for
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