Question

The trail balance of balance sheet accounts of Lancers a popular casual dining spot as of December 31, 20×3 is as follows: DEBITS Cash 5,000 Marketable securities 10,000 Accounts receivable 100,000 Food inventory 15,000 prepaid rent 5,000 prepaid insurance 8,000 investments 50,000 land 80,000 building 420,000 equipment 100,000

CREDITS allowance for doubtful accounts 5,000 accumulated depreciation 100,000 accounts payable 15,000 income taxes payable 0 accured expenses 25,000 dividends payable 0 long term debt 300,000 capital stock 89,000 paid in capital in excess of par 68,000 retained earnings (1/1/x3) 61,000

Additional information a. Dividends declared during 20×3 totaled 30,000. Only 20,000 of the dividends declared in 20×3 have been paid as of December 31, 20×3. The unpaid dividends have not been recorded. b. Operations generated 800,000 of revenue for 20×3. Expenses recorded totaled 650,000. Additionally adjustments required are as follows: 1. The Allowance for doubtful accounts should be adjusted to 10 percent of accounts receivable. 2. Prepaid insurance of 8,000 is the premium paid for insurance coverage for July 1, 20×3 through June 30 20×4. 3. Unreocrded depreciation expense for 20×3 totals 41,000 4. Income taxes have not been recorded, Lancers averge rate is 20 percent. c. The long term debt account includes 50,000 which must be paid on june 30, 20×4.

Prepare a balance sheet according to the USALI.