Case study on financial position

Listed below in random order are the items to be included in the balance sheet of Deep River Lodge at December 31, 2011: Equipment. . . . . . . . . . . . . . . . . $ 9,000 Buildings . . . . . . . . . . . . . . . . $430,000 Land . . . . . . . . . . . . . . . . . . . . . 140,000 Capital Stock. . . . . . . . . . . . . ? Accounts Payable. . . . . . . . . . . 27,400 Cash . . . . . . . . . . . . . . . . . . . 9,100 Accounts Receivable . . . . . . . . 3,300 Furnishings . . . . . . . . . . . . . . 22,600 Salaries Payable . . . . . . . . . . . 13,200 Notes Payable. . . . . . . . . . . . 217,000 Interest Payable . . . . . . . . . . . . 4,000 Retained Earnings . . . . . . . . 202,400 Instructions a. Prepare a balance sheet at December 31, 2011. Include a proper heading and organize your balance sheet similar to the illustrations shown in Chapter 2. (After “Buildings,” you may list the remaining assets in any order.) You will need to compute the amount to be shown for Capital Stock. b. Assume that no payment is due on the notes payable until 2013. Does this balance sheet indicate that the company is in a strong financial position as of December 31, 2011? Explain briefly.

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