DecisionMaking Across the Organization Whitegloves Janitoria

Decision-Making Across the Organization Whitegloves Janitorial Service was started 2 years ago by 201 7. Ifthese trgns are not met, the bank loan will be refinanced-S%=nest A, December 11, 2017 the aceea ia ia wherem liini aver le pped foi lane a e Lyna Sanders Because business hn been excepionally good, Lyna docided on Jaly 1,2917, ots by quring dditonal tck nd g twe oe tn To Sancr de WHITEGLOVES JANITORIAL SIR?CE December 31, 2017 Current assets Current liablities Cash 6.500 9,000 $10,000 Accounts payable Long term liability Total liabilnies Supplies Prepaid inarance 5,200 Total current iabdnies $12.500 Total current ansets 25.500 Notos peyable 15,000 Property plant, and egiipment 22000 Delivery tnwks (net)3400 10,000 Total property, plant, and Retained earnings 4 000 Total assets 81,500 Total lahilities and Lynn presented the balance sheet to the bank\'s loan officer on Jaary 2 mmediately realized that the balance 1. Unbelled janitorial services performed were $3,700 2 Janitorial supplies on hand were $2,500 r sheet had been prepared from a wial balance and not omn duted wl hle The nle at at th eahed cod of th n Prepad insurance was a 3 year policy dated Janmuary 1, 201 4. December expenses incurred but unpaid at December 31,5500 5. Interest on the bank loan was not recorded e sheet wewe s January 1, 2017. Depreciation for 2017 was $2,000 for cleaning equipment and $5,000 for delivery truck With the class divided into groups, answer the followng (a) Prepare a correct balance sheet b) Were the terms of the bank loan met? Explain

Solution

Liabilities and Owner’s Equity Assets Current liabilities Current assets Notes payable 10,000 Cash 6,500 Interest Payable 1,250 Accounts Receivables 9,000 Accounts Payables 2,500 Add : Unbilled Services 3,700 12,700 Add : December Expenses 500 Janiitoroal Supplies 5,200 Total current liabilities 14,250 Less : Adjustments -2,700 2,500 Long-term liability Prepaid Insurance 4,800 Notes Payable 15,000 Less : for 2008 -1,600 3,200 Total liabilities 29,250 Property, plant & equip. Cleaning Equipment 28,000 Stockholders’ equity Delivery Truck 44000 Common stock 40,000 72,000 Retained Earnings 11,650 51,650 Less : Accumulated Depr. -16,000 56,000 Total Liabilities & stockholders’ equity (40,000+11,650) 80,900 Total assets 80,900