The bookkeeper may have made a mistake when computing cost of good sold. She included total production costs for 2011 and did not adjust ending inventory for the $35,500 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 $250,000.
The company had already paid $24,000 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 $500,000, the downpayment is $50,000 and a note to the bank covers the rest.
Trial Balance (accounts in alphabetical order)
Cost of goods sold
Equipment (net of depreciation)
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.
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