Question

Dynamic Weight Loss Co. offers personal weight reduction consulting services to individuals. After all the accounts have been closed on June 30, 20Y7, the end of the fiscal year, the balances of selected accounts from the ledger of Dynamic Weight Loss are as follows:
Accounts Payable $51,200
Accounts Receivable 187,500
Accumulated Depreciation - Equipment 186,000
Cash ?
Common Stock 100,000
Equipment 325,900
Land 375,000
prepaid Insurance 8400
Prepaid Rent 6000
Retained Earnings 620,300
Salaries Payable 7500
Supplies 11,200
Unearned Fees 21,000

Required:
Prepare a classified balance sheet that includes the correct balance for Cash.

Answer 1

Answer:

                                    Dynamic Weight Loss Co.

                Statement of Financial position as at June 30, 20Y7

                                              Assets

Current Asset                                                        $                      $

Cash                                                                    72,000

Accounts Receivable                                         187,500

Supplies                                                                11,200

prepaid Insurance                                                 8,400

Prepaid Rent                                                          6,000

  Total Current asset                                                                  285,100

Property, plant and Equipment

Land                                                                      375,000

Equipment                                                            325,900

Accumulated Depreciation - Equipment           (186,000)       514,900

Total Assets                                                                               800,000

                               Liabilities and Owners Equities

Current liabilities

Accounts Payable                                                  51,200

Salaries Payable                                                      7,500

Unearned Fees                                                     21,000

Total liabilities                                                                               79,700

Owners Equities

Common Stock                                                     100,000

Retained Earnings                                                620,300

Total Equities                                                                             720,300

Total Liabilities and Owners Equities                                       800,000

Explanation:

The balance sheet shows the company's assets, liabilities and equities.

Using the accounting equation

Assets = Liabilities + Equities

Total assets

= 187,500 + 325,900 - 186,000 + 375,000 + 8400 + 6000 + 11,200 + C

where C is the closing balance in the cash account

= 728,000 + C

Total liabilities

= 51,200 + 7500 + 21,000

= $79,700

Total equities

= 620,300 + 100,000

= $720,300

Since Assets = Liabilities + Equities

728,000 + C = 720,300 + 79,700

C =  720,300 + 79,700 - 728,000

C = $72,000