The Scott Company shows the following alphabetical list of account balances as of December 31, 2018. Solve, a. Construct a balance sheet for Scott Company as of December 31, 2018. b. Demonstrate that the fundamental accounting equation holds by stating the dollar values of the terms in the equation. AccountBalanceAccounts payable$50,000AccountBalanceAccounts receivable$80,000Accrued taxes$20,000Buildings (net value) $205,000Cash$40,000Dividends payableEquipment (net value) $180,000$20,000AccountBalanceFinished goods$30,000Land value$115,000Long-term mortgages $390,000Notes payable$60,000Raw material inventory $40,000Stockholder's equity$150,000

Accounting Equation:- It is the equation where total assets are equal to the sum of total…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Scott Company shows the following alphabetical list of account balances as of December 31, 2018. Solve, a. Construct a balance sheet for Scott Company as of December 31, 2018. b. Demonstrate that the fundamental accounting equation holds by stating the dollar values of the terms in the equation.

Account
Balance
Accounts payable
$50,000
Account
Balance
Accounts receivable
$80,000
Accrued taxes
$20,000
Buildings (net value) $205,000
Cash
$40,000
Dividends payable
Equipment (net value) $180,000
$20,000
Account
Balance
Finished goods
$30,000
Land value
$115,000
Long-term mortgages $390,000
Notes payable
$60,000
Raw material inventory $40,000
Stockholder's equity
$150,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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