Questions -

Q1. Presented below are selected amounts from the records of McGraw Corporation as of December 31, 2012.

(a) Compute net income for 2012.

Q2. The bookkeeper for Garfield Company has prepared the following balance sheet as of July 31, 2012.

The following additional information is provided.

1. Cash includes $1,200 in a petty cash fund and $12,400 in a bond sinking fund.

2. The net accounts receivable balance is comprised of the following three items: (a) accounts receivable-debit balances $53,380; (b) accounts receivable-credit balances $8,000; (c) allowance for doubtful accounts $3,500.

3. Merchandise inventory costing $5,600 was shipped out on consignment on July 31, 2012. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,600 were recognized on these consigned goods.

4. Equipment had a cost of $113,380 and an accumulated depreciation balance of $29,380.

5. Taxes payable of $9,010 were accrued on July 31. Garfield Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset against the taxes payable amount.

Prepare a corrected classified balance sheet as of July 31, 2012, from the available information, adjusting the account balances using the additional information.