E5-5 Sargent
Corporation
P5-5 (Balance
Sheet Adjustment and Preparation)
Presented below
is the balance sheet of Sargent Corporation for the current year, 2014.
|
||||||||||||||||||||||||
The following
information is presented.
1 The current
assets section includes cash $150,000, accounts receivable $170,000 less
$10,000 for allowance for doubtful accounts, inventories $180,000, and unearned
rent revenue $5,000. Inventoy is stated on the lower-of-FIFO-cost-or-market.
2. The investments
section includes the cash surrender value of a life insurance contract $40,000;
investments in common stock, short-term (trading) $80,000 and long-term
(available-for-sale) $270,000; and bond sinking fund $250,000. The cost and
fair value of investments in common stock are the same.
3. Property,
plant, and equipment includes buildings $1,040,000 less accumulated
depreciation $360,000; equipment $450,000 less accumulated depreciation
$180,000; land $500,000; and land held for future use $270,000.
4. Intangible
assets include a franchise $165,000; goodwill $100,000; and discount on bonds
payable $40,000.
5. Current
liabilities include accounts payable $140,000; notes payable—short-term $80,000
and long-term $120,000; and income taxes payable $40,000.
6. Long-term
liabilities are composed solely of 7% bonds payable due 2022.
7. Stockholders'
equity has preferred stock, no par value, authorized 200,000 shares, issued
70,000 shares for $450,000; and common stock, $1.00 par value, authorized
400,000 shares, issued 100,000 shares at an average price of $10. In addition,
the corporation has retained earnings of $320,000.
Instructions
Prepare a
balance sheet in good form, adjusting the amounts in each balance sheet
classification as affected by the information given above.
TUTORIAL PREVIEW
SARGENT CORPORATION
| |||
Balance Sheet
| |||
December 31, 2014
| |||
Assets
| |||
Current assets
| |||
Cash
|
$150,000
| ||
Equity investments (Trading)
|
80,000
| ||
File name: E5-5 Sargent
Corporation.docx File type: . docx PRICE:$7
