Carlos Verde Owns a Small Nursery

question 63

Essay

Carlos Verde owns a small nursery. He recently approached the local bank for a loan to finance an expansion of his nursery. Carlos prepared the balance sheet given below and submitted it with his loan application. The balance sheet does not conform to generally accepted accounting principles. Using the additional information provided by the owner, prepare a corrected balance sheet in accordance with generally accepted accounting principles.
VERDE GARDEN SPOT
Balance Sheet December 31, 2019

Additional information provided by owner:
1. The inventory has an original cost of $42,000. It is listed on the balance sheet at what it would cost to purchase today.
2. Included in the cash listed on the balance sheet is $4,000 in Carlos Verde's personal checking account.
3. Depreciation allowable to date on the equipment is $5,000. Depreciation allowable to date on the truck is $3,000.

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Definitions:

Animal

A living organism belonging to the kingdom Animalia, typically characterized by voluntary movement, sensory capabilities, and consumption of organic materials for energy.

Intermittent Reinforcement

A conditioning schedule in which a reward or punishment is not administered every time the desired response is performed.

Extinction

In behavioral psychology, the process through which a conditioned response decreases or disappears after the conditioned stimulus is repeatedly presented without the unconditioned stimulus.

Continuous Reinforcement

A learning process in operant conditioning where a behavior is reinforced every time it is exhibited, leading to quicker acquisition of the behavior.