The bookkeeper for Garfield Company has prepared the following balance sheet as of July 31, 2012.
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GARFIELD COMPANY
BALANCE SHEET
AS OF JULY 31, 2012
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Cash
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69,000
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Notes and accounts payable
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$44,000
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Accounts receivable (net)
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40,500
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Long-term liabilities
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75,000
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Inventory
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60,000
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Stockholders' equity
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155,500
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Equipment (net)
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84,000
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$274,500
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Patents
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21,000
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$274,500
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The following additional information is provided.
1. Cash includes $1,200 in a petty cash fund and $12,000 in a bond sinking fund.
2. The net accounts receivable balance is comprised of the following three items: (a) accounts receivable-debit balances $52,000; (b) accounts receivable-credit balances $8,000; (c) allowance for doubtful accounts $3,500.
3. Merchandise inventory costing $5,300 was shipped out on consignment on July 31, 2012. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,300 were recognized on these consigned goods.
4. Equipment had a cost of $112,000 and an accumulated depreciation balance of $28,000.
5. Taxes payable of $9,000 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.
Instructions
Prepare a corrected classified balance sheet as of July 31, 2012, from the available information, adjusting the account balances using the additional information.