From the Following Accounts and Amounts Prepare a Balance Sheet

question 36

Essay

From the following accounts and amounts prepare a balance sheet for the Swell Company for December 31, 2010. You must compute the amount for retained earnings to complete the balance sheet.
$\begin{array}{lr}\text { Accounts Payable } & \$ 61,250 \\\text { Accounts Receivable } & \$ 70,500 \\\text { Building } & \$ 50,000 \\\text { Share Capital } & \$ 50,000 \\\text { Cash } & \$ 64,000 \\\text { Equipment } & \$ 30,000 \\\text { Insurance Expense } & \$ 5,000 \\\text { Land } & \$ 125,000 \\\text { Notes Payable } & \$ 175,000 \\\text { Sales Revenue } & \$ 25,000 \\\text { Salaries Expense } & \$ 20,000\end{array}$

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Definitions:

Static Budget

A financial plan that does not change or adjust over the period, even when there are significant changes in the levels of activity.

Variable Costs

Expenses that change in proportion to the level of activity or production volume.

Static Budget

A budget that does not change or adapt over time, based on the assumption of a fixed level of activity.

Activity Index

The activity that causes changes in the behavior of costs.