Reference no: EM13507081

The bookkeeper for Garfield Company has prepared the following balance sheet as of July 31, 2012.

GARFIELD COMPANY BALANCE SHEET AS OF JULY 31, 2012
Cash	69,000	Notes and accounts payable	$44,000
Accounts receivable (net)	40,500	Long-term liabilities	75,000
Inventory	60,000	Stockholders' equity	155,500
Equipment (net)	84,000		$274,500
Patents	21,000
	$274,500

The following additional information is provided.

1. Cash includes $1,200 in a petty cash fund and $12,000 in a bond sinking fund.

2. The net accounts receivable balance is comprised of the following three items: (a) accounts receivable-debit balances $52,000; (b) accounts receivable-credit balances $8,000; (c) allowance for doubtful accounts $3,500.

3. Merchandise inventory costing $5,300 was shipped out on consignment on July 31, 2012. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,300 were recognized on these consigned goods.

4. Equipment had a cost of $112,000 and an accumulated depreciation balance of $28,000.

5. Taxes payable of $9,000 were accrued on July 31. Garfield Company, however, had set up a cash fund to meet this obligation. This cash fund was not included in the cash balance, but was offset against the taxes payable amount.

Instructions

Prepare a corrected classified balance sheet as of July 31, 2012, from the available information, adjusting the account balances using the additional information.