GARFIELD COMPANY

GARFIELD COMPANY
BALANCE SHEET
AS OF JULY 31, 2012
Cash $ 71,970 Notes payable 47,590
Accounts receivable (net) 44,090 Long-term liabilities 77,970
Inventory 62,970 Stockholders’ equity 158,470
Equipment (net) 84,000 $284,030
Patents 21,000
$284,030

The following additional information is provided.

1. Cash includes $1,200 in a petty cash fund and $12,490 in a bond sinking fund.
2. The net accounts receivable balance is comprised of the following three items: (a) accounts receivable—debit balances $55,590; (b) accounts receivable—credit balances $8,000; (c) allowance for doubtful accounts $3,500.
3. Merchandise inventory costing $5,430 was shipped out on consignment on July 31, 2012. The ending inventory balance does not include the consigned goods. Receivables in the amount of $5,430 were recognized on these consigned goods.
4. Equipment had a cost of $115,590 and an accumulated depreciation balance of $31,590.
5. Taxes payable of $9,380 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.
Prepare a corrected classified balance sheet as of July 31, 2012, from the available information, adjusting the account balances using the additional information. (List current assets in order of liquidity)

5-14
The comparative balance sheets of Connecticut Inc. at the beginning and the end of the year 2012 appear on the next page.

CONNECTICUT INC.
BALANCE SHEETS

Dec. 31, 2012

Jan. 1, 2012

Inc./Dec.
Assets
Cash $47,080 $15,390 $31,690 Inc.
Accounts receivable 95,470 90,390 5,080 Inc.
Equipment 43,470 24,390 19,080 Inc.
Less: Accumulated depreciation—equipment (19,390 ) (13,390 ) 6,000 Inc.
Total $166,630 $116,780
Liabilities and Stockholders’ Equity
Accounts payable $24,470 $17,390 $7,080 Inc.
Common stock 102,080 82,390 19,690 Inc.
Retained earnings 40,080 17,000 23,080 Inc.
Total $166,630 $116,780

Net income of $38,470 was reported, and dividends of $15,390 were paid in 2012. New equipment was purchased and none was sold.

Prepare a statement of cash flows for the year 2012. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)