Evaluating an Incorrect Balance Sheet

Accounting Practice
Below you will find the balance sheet of a professional services company. It has not been properly maintained and it
1 Please highlight any line item that concerns you (or that you would want to ask a question about).
In the adjacent cell, describe why it concerns you, and how you would go about fixing it. If it is a question, please write th
2 Please list below any general overarching issues you see with this balance sheet, and any changes/improvements to the
3 Do you think this company is financially healthy? Explain
ABC Corp.
Balance Sheet
As of Jan 31, 2021
Total
ASSETS
Current Assets
Bank Accounts
891,409.92
10012 United Bank (Bank of GT)
276,732.96
10016 M&T Bank
Total Bank Accounts
$
1,168,142.88
Accounts Receivable
2,823,288.85
10100 Accounts Receivable
14,832.76
10102 Provision for doubtful accounts
Total Accounts Receivable
$
2,838,121.61
Other Current Assets
0.00
10200 Other receivable
787,693.07
10245 – Due From Corp
Total 10200 Other receivable
$
0.27
10270 Work in progress
Total Other Current Assets
Total Current Assets
787,693.07
54,404.21
10260 – Prepaid Expenses
$
842,097.55
$
4,848,362.04
Fixed Assets
10300 Furniture and Equipment
0.00
10301 F&E DC Studio
38,523.07
10303 F&E DC
14,385.82
0.00
10305 Accumulated Depreciation F&E
0.08
Accumulated Depreciation
-16,199.47
10304 A/D DC
Total Accumulated Depreciation
Total 10305 Accumulated Depreciation F&E
Total 10300 Furniture and Equipment
-$
16,199.39
-$
16,199.39
$
36,709.50
6,050.00
10400 Leasehold Improvements
-50.42
10404 Accum. Dep. Leasehold Improvem
Total 10400 Leasehold Improvements
$
5,999.58
4,456.45
10600 Computers
10601 Computers – cost
100,912.47
10602 Accum. Dep. – Computers
-44,541.75
Total 10600 Computers
$
60,827.17
0.00
10700 Software
10701 Software – Cost
55,466.92
10702 Accum. Depreciation – Software
-10,618.46
Total 10700 Software
Total Fixed Assets
$
44,848.46
$
148,384.71
Other Assets
10800 Website
15,539.50
10801 Website – Cost
-15,539.50
10802 Website – Accumulated Dep.
Total 10800 Website
Total Other Assets
TOTAL ASSETS
$
0.00
$
0.00
$
4,996,746.75
$
774,370.89
$
121,268.42
LIABILITIES AND EQUITY
Liabilities
Current Liabilities
Accounts Payable
774,370.89
20010 Accounts Payable
Total Accounts Payable
Credit Cards
121,268.42
20018 Corporate Card – Main
Total Credit Cards
Other Current Liabilities
20005 Media Buy Obligation
229,500.03
20055 Accrued Bonuses
125,000.00
1,595,705.83
20150 LOC Payable to Corp
20300 Section 125
46,792.56
203500 Accrued Expenses
31,236.99
20360 Deferred Tax Liability
185,999.00
20500 Payroll Liabilities
-73,889.37
20650 Unearned Revenue
212,301.64
25500 Sales Tax Payable
3,040.65
25510 DC Treasurer Payable
40,897.35
Total Other Current Liabilities
Total Current Liabilities
$
2,396,584.68
$
3,292,223.99
Total Liabilities
$
3,292,223.99
Equity
30030 Draws
30031 PD
-478,250.00
30032 CW
-478,250.00
Total 30030 Draws
-$
1,249,361.19
Net Income
Total Equity
TOTAL LIABILITIES AND EQUITY
956,500.00
721,661.57
30200 Retained Earnings
$
1,014,522.76
$
4,306,746.75
It has not been properly maintained and it requires corrections and improvements.
ask a question about).
bout fixing it. If it is a question, please write the question and why you are asking it.
sheet, and any changes/improvements to the chart of accounts or otherwise that you would recommend.
Responses to question #1