Question

Construct a balance sheet for Sophie’s Sofas given the following data. What is shareholders’ equity? Cash balances = $10,000 Inventory of sofas = $200,000 Store and property = $100,000 Accounts receivable = $22,000 Accounts payable = $17,000 Long-term debt = $170,000

Answer 1

Balance Sheet of Sophie's Sofas for the year ended December 31th 20XX

Cash 10,000 Account Payable 17,000

Account Receivable 22,000 Long Term Debt 170,000

Inventory 200,000 Total Liabilities 187,000

Current Assets 232,000 Stockholders Equity 145,000

PPE 100,000

Total Assets 332,000 Total SE + Liab 332,000

Step-by-step explanation:

We calculate equity using the accounting equation:

Assets = Liabilities + Equity

We add all the assets in one column, and the liab in another. Now, once we got these two, we calculate equity by subtracting:

332,000 - 187,000 = Equity = 145,000