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Chapter 5: 1 (page 248)

(L03) (Preparation of a Classified Balance Sheet, Periodic Inventory) Presented below is a list of accounts in alphabetical order.

Accounts Receivable-Inventory-Ending

Accumulated Depreciation鈥擝uildings-Land

Accumulated Depreciation鈥擡quipment Land for Future Plant Site

Accumulated Other Comprehensive Income - Loss from Flood

Advances to Employees- Noncontrolling Interest

Advertising Expense - Notes Payable (due next year)

Allowance for Doubtful Accounts - Paid-in Capital in Excess of Par鈥� preferred stock

Bond Sinking Fund -Patents

Bonds Payable - Payroll Taxes Payable

Buildings - Pension Liability

Cash (in bank) - Petty Cash

Cash (on hand) - Preferred Stock

Cash Surrender Value of Life Insurance -Premium on Bonds Payable

Commission Expense- Prepaid Rent

Common Stock- Purchase Returns and Allowances

Copyrights - Purchases

Debt Investments (trading)- Retained Earnings

Dividends Payable- Salaries and Wages Expense (sales)

Equipment - Salaries and Wages Payable

Freight-In Sales- Discounts

Gain on Disposal of Equipment- Sales Revenue

Interest Receivable - Treasury Stock (at cost)

Inventory鈥擝eginning Unearned Subscriptions Revenue

Instructions Prepare a classified balance sheet in good form. (No monetary amounts are to be shown.)

Short Answer

Expert verified

The company鈥檚 balance sheet reports only those accounts whose balances must be carried forward to next year.

Step by step solution

01

Definition of Off-Balance Sheet Items

The items that are not reported on the balance sheet of the company are known as off-balance sheet items. It includes items that are not directly owned by the business entity and liabilities towards which the business entity does not have a direct obligation.

02

Classified Balance sheet

Particular

Amount $

Amount $

Assets

Current assets:

Cash (in bank)

Cash (on hand)

Other cash accounts (petty cash)

Accounts receivables

Less: allowance for doubtful accounts

Inventory at end

Prepaid rent

Interest receivable

Advance to employees

Cash surrender value of life insurance

Total current assets

Long term investment:

Debt investment

Property, plant, and equipment

Land

Building

Less: Accumulated depreciation 鈥� building

Equipment

Less: Accumulated depreciation 鈥� equipment

Intangible assets

Patent

Copyrights

Total assets

Liabilities and shareholder鈥檚 equity

Current liabilities:

Note payable

Salaries and wages payable

Dividend payable

Payroll tax payable

Unearned subscription payable

Total current liabilities

Non-Current liabilities

Land held for future use

Pension liability

Bond sinking fund

Bond payable

Add: premium on bond payable

Total non-current liabilities

Stockholder鈥檚 equity:

Preferred stock

Common stock

Additional paid-in preferred capital

Less: Treasury stock

Retained earnings

Accumulated other comprehensive income

Non-controlling interest

Total stockholder鈥檚 equity

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Most popular questions from this chapter

The net income for the year for Genesis, Inc. is \(750,000, but the statement of cash flows reports that the net cash provided by operating activities is \)640,000. What might account for the difference?

Grant Wood Corporation鈥檚 balance sheet at the end of 2016 included the following items.

Current assets (\(Cash 82,000)

\)235,000

Current liabilities

\(150,000

Land

30,000

Bond payable

100,000

Building

120,000

Common stock

180,000

Equipment

90,000

Retained earnings

44,000

Accumulated depreciation 鈥� Building

(30,000)

Accumulated depreciation 鈥� Equipment

(11,000)

Patents

40,000

Total

\)474,000

Total

\(474,000

The following information is available for 2017.

1. Net income was \)55,000.

2. Equipment (cost \(20,000 and accumulated depreciation \)8,000) was sold for \(10,000.

3. Depreciation expense was \)4,000 on the building and \(9,000 on equipment.

4. Patent amortization was \)2,500.

5. Current assets other than cash increased by \(29,000. Current liabilities increased by \)13,000.

6. An addition to the building was completed at a cost of \(27,000.

7. A long-term investment in stock was purchased for \)16,000.

8. Bonds payable of \(50,000 were issued.

9. Cash dividends of \)30,000 were declared and paid.

10. Treasury stock was purchased at a cost of $11,000.

Instructions

(Show only totals for current assets and current liabilities.)

(a) Prepare a statement of cash flows for 2017.

(b) Prepare a balance sheet at December 31, 2017.

Keyser Beverage Company reported the following items in the most recent year.

Net income $40,000

Dividends paid 5,000

Increase in accounts receivable 10,000

Increase in accounts payable 7,000

Purchase of equipment (capital expenditure) 8,000

Depreciation expense 4,000

Issue of notes payable 20,000

Compute net cash provided by operating activities, the net change in cash during the year, and free cash flow.

E5-11 (L03) EXCEL (Balance Sheet Preparation) Presented below is the adjusted trial balance of Kelly Corporation at December 31, 2017.

Particular

Debit

Credit

Cash

\(?

Supplies

1,200

Prepaid insurance

1,000

Equipment

48,000

Accumulated depreciation 鈥� Equipment

\)4,000

Trademarks

950

Accounts payable

10,000

Salaries and wages payable

500

Unearned service revenue

2,000

Bonds payable (due 2024)

9,000

Common stock

10,000

Retained earnings

25,000

Service revenue

10,000

Salaries and wages expenses

9,000

Insurance expenses

1,400

Rent expenses

1,200

Interest expenses

900

Total

\(?

\)?

Additional information:

1. Net loss for the year was $2,500.

2. No dividends were declared during 2017.

Instructions

Prepare a classified balance sheet as of December 31, 2017.

Presented below is a condensed version of the comparative balance sheets for Zubin Mehta Corporation for the last two years at December 31.

2017

2016

Cash

\(177,000

\)78,000

Accounts receivables

180,000

185,000

Investment

52,000

74,000

Equipment

298,000

240,000

Accumulated depreciation

(106,000)

(89,000)

Current liabilities

134,000

151,000

Common stock

160,000

160,000

Retained earnings

307,000

177,000

Additional information:

Investments were sold at a loss of \(10,000; no equipment was sold; cash dividends paid were \)30,000; and net income was $160,000.

Instructions

(a) Prepare a statement of cash flows for 2017 for Zubin Mehta Corporation.

(b) Determine Zubin Mehta Corporation鈥檚 free cash flow.
See all solutions

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