National Shops, Inc. reported the following amounts on its balance sheet as of December 31, 2016: Required:
1. What is the amount of National's total assets as of December 31, 2016?
2. Identify the items listed above that are liabilities.
3. What is the amount of National's retained earnings as of December 31, 2016?
4. Prepare a balance sheet for National at December 31, 2016.
5. National wishes to purchase merchandise from your company on account. The amount of the purchases would probably be about $10,000 per month, and the terms would require National to make payment in full within 30 days. Would you recommend that your company grant credit to National under these terms? Explain the reasoning for your response.

Question

National Shops, Inc. reported the following amounts on its balance sheet as of December 31, 2016:  Required:
1. What is the amount of National's total assets as of December 31, 2016?
2. Identify the items listed above that are liabilities.
3. What is the amount of National's retained earnings as of December 31, 2016?
4. Prepare a balance sheet for National at December 31, 2016.
5. National wishes to purchase merchandise from your company on account. The amount of the purchases would probably be about $10,000 per month, and the terms would require National to make payment in full within 30 days. Would you recommend that your company grant credit to National under these terms? Explain the reasoning for your response.

Quizplus · Accepted Answer

The Answer of National Shops, Inc. reported the following amounts on its balance sheet as of December 31, 2016:  Required:
1. What is the amount of National's total assets as of December 31, 2016?
2. Identify the items listed above that are liabilities.
3. What is the amount of National's retained earnings as of December 31, 2016?
4. Prepare a balance sheet for National at December 31, 2016.
5. National wishes to purchase merchandise from your company on account. The amount of the purchases would probably be about $10,000 per month, and the terms would require National to make payment in full within 30 days. Would you recommend that your company grant credit to National under these terms? Explain the reasoning for your response.