[curiousbee]

I'm using Financial Accounting by Williams, Haka, et al. as my textbook and one question is driving me nuts.

I'm stuck on Problem 2.9A, the one about the Berkeley Playhouse, in case you have the same book.

if you don't, here's a little background on the problem.

Helena Berkeley is the founder and manager of the Berkeley Playhouse. She needs a bank loan so she made a balance sheet to present to the bank. The valuation of assets are mostly wrong. The balance sheet showed the financial position of the business as of Sept. 30, 2005.

my questions:

1. she listed cash as $21, 900. -- 15000 from company bank account, 1900 from company safe and 5000 from Berkeley's personal savings account.

SHOULD THE 5000 from her personal account be included? What about personal credit card debts? or personal purchases that aren't used for the business?

2. Accounts receivable is listed as $132200 -- 7200 from Artistic Tours and 125000 from Berkeley's estimate of future ticket sales from September 30 - December 31.

SHOULD FUTURE TICKET SALES BE INCLUDED UNDER ACCTS RECEIVABLE?

3. Berkeley Playhouse rents their building from another company at $3000 per month. In the balance sheet, she listed the value of the building as S27000 representing the accumulated rent she paid up to September 30.

IS THIS CORRECT? should it really be listed as 27000?

please please please help me. :eek:

[avenger9000]

Firstly, You need to read the annoucements and rules carefully before you post anything, then you would have realised that we are not here to do your homework for you. However, once you have attempted the problem yourself, you can post what you have done and we can give you suggestions as to whether you are on the right track...

[curiousbee]

oh oops. Sorry, I'm just a little panicky at the moment so I missed the whole guidelines post. My apologies.

okay, here's the given balance sheet.

BERKELEY PLAYHOUSE
Balance Sheet
September 30, 2005

ASSETS
Cash... $ 21 900
Acct Rec... 132 200
Props&Costumes... 3 000
Theater Building... 27 000
Lighting Equip... 9 400
Automobile... 15 000
TOTAL $ 208 500

LIABILITIES
Accounts Payable... $ 6 000
Salaries Payable... 29 200
Total Liabilities... $ 35 200

OWNER'S EQUITY
Helena Berkeley, Capital... $ 50 000
TOTAL $ 85 200

okay so this is what I did.

1. given: breakdown of $21 900 cash: 15000 from company bank account, 1900 in company safe and 5000 from H. Berkeley's personal savings account. I subtracted 5000 since personal savings shouldn't be included. so the new cash total is $16900

2. given: accts receivable $132200 breakdown: $7200 from Artistic Tours and $125000 estimated future ticket sales from Sept 30 - Dec 31, 2005. I only included the $7200 since the balance sheet is as of sept 30 2005

3. given: Props and costumes worth $18000 were purchased several days ago. She paid $3000 cash and wrote a note payable for the remaining $15000. She didn't include the note payable since it isn't due till January of the next year. I listed props and costumes as $18000. I subtracted $3000 from cash. (new cash is $13900) i added a notes payable to liabilities of $15000

4. given: Berkeley Playhouse rents the theater building from Kievits International at $3000 per month. The $27000 in the bal sheet represents the rent paid through Sept 30 of the current year. i kept theater building at $27000

5. given: the accounts payable include business debts of $3900 and $2100 balance of Berkeley's personal Visa card. i changed accounts payable to $3900

6. given: The automobile is Berkley's classic 1978 Jaguar which purchased two years ago for $9000. Value today is $15000 so that's the value she listed it as. She doesn't use it for the business. i took this asset out completely

7. given: Lighting equipment was purchased on September 26 at $9400 but the stage manager says that it isn't worth a dime. I kept it as it is

8. given: salaries payable include $25000 grand offered to an actor for a role in the December play and $4200 owed to the stagehands for work done though Sept 30. i kept it as is.

9. given: Berkeley invested $20 000 in the business when she started it years ago. Someone wants to buy it today for $50 000 so that's what she valued it as. I changed capital to $20 000

so now my balance sheet looks like this:

BERKELEY PLAYHOUSE
Balance Sheet
September 30, 2005

ASSETS
Cash... $ 13 900
Acct Rec... 7 200
Props&Costumes... 18 000
Theater Building... 27 000
Lighting Equip... 9 400

TOTAL $ 75 500

LIABILITIES
Notes Payable... $ 15 000
Accounts Payable... 6 000
Salaries Payable... 29 200
Total Liabilities... $ 48 100

OWNER'S EQUITY
Helena Berkeley, Capital... $ 20 000
TOTAL $ 68 100

what am I doing wrong?