balance sheets 2

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Below find a balance sheet for VWV Company.

VWV Company

Balance Sheet

December 31, 20XX

Assets

Liabilities

Current assets

Current liabilities

Cash

$72,000

Accounts payable

$12,000

Accounts receivable

18,000

Interest payable

12,000

Interest receivable

1,000

Inventory

60,000

Total current assets

$151,000

Total current liabilities

$24,000

Long-term assets

Long-term liabilities

Equipment (net of depreciation)

$128,000

Note payable

100,000

Total long-term assets

$128,000

Total long-term liabilities

$100,000

Equity

Common stock

10,000

Paid-in capital

50,000

Retained earnings

95,000

Total equity

$155,000

Total assets

279,000

Total liabilities and equity

$279,000

Required:

  • Recreate the balance sheet in an Excel spreadsheet. Use cell formulae to add and subtract numbers. Add a column next to the balance sheet for answers to the questions listed below.

Questions:

  • Is accounts payable larger or smaller than accounts receivable? What is the difference? What do the numbers indicate? Explain.
  • What does “equipment net of depreciation” mean?
  • Are payables short-term or long-term?
  • Determine total liabilities.
  • Determine net short-term assets or liabilities.
  • Determine the total amount owed by VWV at the end of the year.
  • How do we know that the above is a corporate (not a sole proprietor) balance sheet?

SLP Assignment Expectations

Submit the Excel spreadsheet. All information should be part of the spreadsheet. Written comments should be brief and refer to the balance sheet. Both content and presentation matter.

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