Question

The following information is available for Buckeye Company:January 1, 2003 December 31, 2003Cash $25,000 $30,000Land 40,000 42,000Notes payable 29,000 45,000Retained earnings 33,000 52,000Accumulated depreciation 4,000 7,000Supplies 8,000 10,000Accounts payable 16,000 17,000Equipment 20,000 ?Accounts receivable 11,000 26,000Contributed capital 40,000 40,000Inventory 18,000 24,000During 2003, Buckeye Company reported sales revenue of $98,000, salaries expense of $22,000, rent expense of $17,000, and cost of goods sold. Additionally, Buckeye Company paid $9,000 of dividends during 2003. (Note - the amount of cost of goods sold has been intentionally omitted from this problem).Calculate the amount of equipment reported in Buckeye Company's balance sheet at December 31, 2003

Answer 1

$29,000

Step-by-step explanation:

The question is to calculate the equipment reported in Buckeye Company's balance sheet December 31, 2003

Step 1: What is the accounting equation

Assets= Liabilities + Equity

a. Calculate the liabilities as at December 31st, 2003

= Notes Payable + Accounts Payable

= $45,000 + $17,000= $62,000

b. Calculate the Owner's equity

= Retained earnings + Capital

=$52,000 + $40,000= $92,000

c. What is Liability + Equity

= $62,000 + $92,000

= $154,000

Step 2: Calculate Assets

= Cash + Land + Supplies + Accounts Receivable + Inventory + Equipment - (Depreciation)

= $30,000 + $42,000 + $10,000 + $26,000 + $24,000 + Equipment - $7,000

= $125,000 + Equipment = $154,000 ( Accounting Equation)

Equipment= $154,000- $125,000

= $29,000