Extracted text: ll SCOM 4:06 PM 81% 81 Star Scripts is as Problem Ser B LO22, LO2-4 PROBLEM 2.1OB Preparing a Balance Sheet; STAR SCRIPTS BALANCE SHEET Discussi Principles Sussion of Accounting NOVEMBER 30, 2015 Liabilities & Owner's Equity Assets $ 5,000 Liabilities: Notes Payable. Accounts Payable. 4,000 Cash...... 3,000 $ 65,000 Accounts Receivable Land...... Building Office Furniture.. Notes Receivable. Total Liabilities. Owner's Equity: Capital Stock Retained Earnings. 60,000 32,000 75,000 $ 97,000 9,600 25,000 $181,600 10,000 Other Assets. Total 74,600 Total $181,600 facts: in the company's safe, and S1,800 in Joe's personal savings account. from since. . Oice furniture includes $2,500 for an Indian rug for the office purchased on November 15 Otfc The total cost of the rug was $10,000. The business paid S2,500 in cash and issued a pote sble to Jana Interiors for the balance due (S7,500). As no payment on the note is due unril January, this debt is not included in the liabilities above. kaluded in the amount for office furniture is a computer that cost $800 but is not on hand because Joe donated it to a local charity. E The "Other Assets" of $25.000 represent the total amount of income taxes Joe has paid the federal government over a period of years. Joe believes the income tax law to be unconstitu- tional, and a friend who attends law school has promised to help Joe recover the taxes paid as soon as he passes the bar exam. 6. The asset "Land" was acquired at a cost of S15,000 but was increased to a valuation of $60,000 when one of Joe's friends offered to pay that much for it if Joe would move the building of the lot. 7. The accounts payable include business debts of $30,000 and the $2,000 balance owed on Joe's personal MasterCard. Instructions a. Prepare a corrected balance sheet at November 30, 2015. b. For each of the seven numbered items above, use a separate numbered paragraph to explain whether the treatment followed by Joe is in accordance with generally accepted accounting principles. 43/43