Book 2 - Chapter 15

15-1.

Digby’s Funeral Parlor Balance Sheet October 31, 2008
Assets
Current assets
Cash	$ 9,500
Short-term investments	2,800
Office supplies	320
Embalming supplies	350
Prepaid insurance	850
Total current assets		$13,820

Property, plant, and equipment
Equipment	$105,500
Less: Accumulated depreciation	$9,500
Total property, plant, and equipment		96,000
Total assets		$109,820


Liabilities and Owner’s Equity
Current liabilities
Accounts payable	$ 5,800
Unearned revenue	500
Salaries payable	200
Interest payable	150
Total current liabilities		$ 6,650

Long-term liabilities
Notes payable		12,000
Total liabilities		18,650

Owner’s equity
Wilson Digby, Capital		91,170
Total liabilities and owner�s equity		$109,820

Note: Any investments in a stock brokerage account are considered short-term investments, because under normal circumstances the investments (such as stocks and bonds) can be sold quickly, simply by contacting the broker and ordering a sale of the investments (and they are not held for the purposes of control).

Learning Goal 15, continued

SOLUTIONS

Section II · Completing the Accounting Cycle

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