https://file.aiquickdraw.com/mathbot/file/17263218084540go9x2wx.jpg

This exercise involves preparing a balance sheet and then analyzing how a fire affecting one of the circus tents would impact the financials.

Let's break it down:

### 1. **Preparing the Balance Sheet:**
To prepare the balance sheet, we'll need to organize the assets, liabilities, and equity.

#### **Assets:**
- **Accounts Receivable:** $7,450
- **Animals:** $189,060
- **Cages:** $24,630
- **Costumes:** $31,500
- **Notes Receivable:** $9,500
- **Props and Equipment:** $89,580
- **Tents:** $63,000
- **Trucks & Wagons:** $105,840
- **Cash:** We need to compute this (unknown value for now).

#### **Liabilities:**
- **Accounts Payable:** $26,100
- **Notes Payable:** $180,000
- **Salaries Payable:** $9,750

#### **Equity:**
- **Capital Stock:** $300,000
- **Retained Earnings:** $27,230

#### **Formula to find Cash:**
The balance sheet follows the accounting equation:

\[
\text{Assets} = \text{Liabilities} + \text{Equity}
\]

We will calculate the total for assets, liabilities, and equity to determine the missing cash value.

#### **Asset Total (without cash):**
\[
7,450 + 189,060 + 24,630 + 31,500 + 9,500 + 89,580 + 63,000 + 105,840 = 520,560
\]

#### **Liabilities Total:**
\[
26,100 + 180,000 + 9,750 = 215,850
\]

#### **Equity Total:**
\[
300,000 + 27,230 = 327,230
\]

Now, using the accounting equation:

\[
\text{Total Assets} = \text{Total Liabilities} + \text{Total Equity}
\]
\[
\text{Cash} + 520,560 = 215,850 + 327,230
\]
\[
\text{Cash} + 520,560 = 543,080
\]
\[
\text{Cash} = 543,080 - 520,560 = 22,520
\]

So, the **Cash** at June 30, 2015, is **$22,520**.

### 2. **Impact of Tent Destruction:**
The fire destroyed a tent valued at $14,300. Since the tent was uninsured, the loss should be reflected directly in the assets, reducing the value of the **Tents** account.

#### Adjustments:
- **Tents** would be reduced by $14,300:
  \[
  63,000 - 14,300 = 48,700
  \]
- The total assets would decrease accordingly by $14,300, but the liabilities and equity sections would remain unchanged. Therefore, the new total for assets would now be $528,780 instead of $543,080.

Would you like more details, or do you have further questions?

### Related Questions:
1. How do you account for uninsured asset losses in financial statements?
2. What happens to equity when an asset is lost due to a disaster?
3. What is the difference between accounts payable and notes payable?
4. How would insurance affect the loss of the tent if it had been insured?
5. Why is retained earnings included under equity on the balance sheet?

#### Tip:
Always ensure that the balance sheet balances by confirming that total assets equal the sum of total liabilities and equity.

Prepare a balance sheet for 'HERE COME THE CLOWNS!' circus by using the provided items and computing the cash at June 30, 2015. Assume a tent worth $14,300 was destroyed and not insured. Explain the required changes.

Learn how to prepare a balance sheet for 'HERE COME THE CLOWNS!' circus, calculate cash values, and account for the loss of a tent destroyed by fire. Understand the application of the accounting equation: Assets = Liabilities + Equity. Suitable for accounting students in Grades 11-12 or early college.

Math Problem Statement

Solution

Ask a new question for Free

By Image

Math Problem Analysis

Mathematical Concepts

Formulas

Theorems

Suitable Grade Level

Related Recommendation