Question

In alphabetical order below are balance sheet items for Karol Company at December 31, 2017.

Answer 1

Answer:

               Karol Company

Balance Sheet as at December 31, 2017

                                             $

Assets

Current Assets

Cash                                 22,000

Accounts receivable       71,000  

Total Assets                    93,000

Equity and Liability

Equity

Common stock                18,000

Retained earnings           10,000

Total Equity                      28,000

Liabilities

Current Liabilities

Accounts payable            65,000

Total Equity & Liabilities 93,000

Explanation:

Balance sheet is the actual presentation of accounting equation which determines that All the asset is equal to the sum of equity and liabilities. It means all the asset made in the company are financed either by equity or liabilities. There are two section in the balance sheet:

Assets section, which accumulates all the assets account balance and their contra accounts as well.

Equity and Liabilities section, which sum up all the account balances of equity and liabilities accounts.

Total of Assets and The total of Equity and Liabilities must be equal.