Q33E_2 - Horngren'S Financial And Managerial Accounting

Question

Preparing the balance sheet 

Requirements

1. Prepare the balance sheet for Wilson Towing Service as of June 30, 2018.

2. What does the balance sheet report?

Step-by-Step Solution

Answer

Wilson Towing Service
Balance Sheet
December 31, 2018
Assets		Liabilities
Cash	$1,400	Accounts Payable	$8,000
Office Supplies	1,000	Notes Payable	6,800
Accounts Receivable	9,000	Total Liabilities	14,800
Equipment	25,850	Stockholders’ Equity
		Common Stock	11,000
		Retained Earnings	11,450
		Total Stockholders’ Equity	22,450
Total Assets	$37,250	Total Liabilities and Stockholders’ Equity	$37,250

Step 1: Explanation of Balance Sheet

The Balance sheet indicates the balances of assets, liabilities, and owners’ equity on a particular date or at the end of an accounting period.

Step 2: Details of balance sheet

In the balance sheet, total assets are $37,250, total liabilities are $14,800, and total stockholders’ equity is $22,450.