One client had indicated that they were interested in purchasing $45,500 worth of products

One client had indicated that they were interested in purchasing $45,500 worth of products. However, the client has not actually committed to the purchase.
•The bookkeeper already corrected the sales account. However, the bookkeeper may have made a mistake when computing cost of goods sold. She included total production costs for 2012 and did not adjust ending inventory for the $45,500 worth of units left at the end of the year. The amount of ending inventory was determined using a physical count.

Additional information for Module 3:
•The company made a secondary offering of stock and raised an additional $225,000.
•The company had already paid $22,000 in dividends before deciding on the offering.
•The company now has cash to invest in a piece of raw land on which to build in the future. The investment takes place before year end. The cost of the land is $400,000, the downpayment is $20,000 and a note to the bank covers the rest.



Smith Company



31-Dec-12



Trial Balance (accounts in alphabetical order)



Debit


Credit


Accounts payable

67,000


Accounts receivable

24,500


Cash

30,000


Common stock

10,000


Depreciation expense

24,350


Cost of goods sold

234,000


Equipment (net of depreciation)

316,000


Insurance

1,400


Inventory

25,000


Long-term debt

145,000


Marketing

4,500


Paid-in capital

90,000


Property taxes

8,900


Rent

18,000


Retained earnings

???


Revenues

406,000


Salaries

67,500


Utilities

6,700


Total

760,850

718,000


Prepare a balance sheet for the company in good format. Update the balance sheet for the changes to income in Module 2 and also consider the effect of paying the dividend. You do not need to include the income statement.