Problem 1 - Current Assets Section of the Balance Sheet
Presented below are selected accounts of Yasunari Kawabata Company at December 31, 2017.
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Inventory (finished goods)
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$52,000
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Cost of Goods Sold
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$ 2,100,000
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Unearned Service Revenue
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90,000
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Notes Receivable
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40,000
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Equipment
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253,000
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Accounts Receivable
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161,000
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Inventory (work in process)
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34,000
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Inventory (raw materials)
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207,000
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Cash
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37,000
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Supplies Expense
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60,000
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Debt Investments (short-term)
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31,000
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Allow. for Doubtful Accounts
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12,000
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Customer Advances
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36,000
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Licenses
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18,000
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Restricted Cash for Plant Expansion
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50,000
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Additional Paid-in Capital
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88,000
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|
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Treasury Stock
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22,000
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The following additional information is available.
1. Inventories are valued at lower-of-cost-or-market using LIFO.
2. Equipment is recorded at cost. Accumulated depreciation, computed on a straight-line basis, is $50,600.
3. The short-term investments have a fair value of $29,000. (Assume they are trading securities.)
4. The notes receivable are due April 30, 2019, with interest receivable every April 30.
The notes bear interest at 6%. (Hint: Accrue interest due on December 31, 2017.)
5. The allowance for doubtful accounts applies to the accounts receivable. Accounts receivable of $50,000 are pledged as collateral on a bank loan.
6. Licenses are recorded net of accumulated amortization of $14,000.
7. Treasury stock is recorded at cost.
Instructions - Prepare the current assets section of Yasunari Kawabata Company's December 31, 2017, balance sheet, with appropriate disclosures.
Problem 2 - Balance Sheet Preparation
Presented below is the adjusted trial balance of Kelly Corporation at December 31, 2017.
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Kelly Corporation Trial Balance December 31, 2017
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Debit
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Credit
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Cash
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$ ?
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|
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Supplies
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1,200
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|
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Prepaid Insurance
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1,000
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|
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Equipment
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48,000
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|
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Accumulated Depreciation - Equipment
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$ 4,000
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Trademarks
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950
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Accounts Payable
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10,000
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Salaries and Wages Payable
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500
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Unearned Service Revenue
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2,000
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Bonds Payable (due 2024)
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9,000
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Common Stock
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10,000
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Retained Earnings
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25,000
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Service Revenue
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10,000
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Salaries and Wages Expense
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9,000
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Insurance Expense
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1,400
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Rent Expense
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1,200
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Interest Expense
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900
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Total
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?
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?
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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.
Problem 3 - Current Liabilities
Norma Smith is the controller of Baylor Corporation and is responsible for the preparation of the year-end financial statements. The following transactions occurred during the year.
(a) On December 20, 2017, a former employee filed a legal action against Baylor for 5100,000 for wrongful dismissal. Management believes the action to be frivolous and without merit. The likelihood of payment to the employee is remote.
(b) Bonuses to key employees based on net income for 2017 are estimated to be 5150,000.
(c) On December 1, 2017, the company borrowed 56013,000 at 8% per year. Interest is paid quarterly.
(d) Accounts receivable at December 31, 2017, is $10,000,000. An aging analysis indicates that Baylor's expense provision (or doubtful accounts is estimated to be 3% of the receivables balance.
(e) On December 15, 2017, the company declared a 52.00 per share dividend on the 40,000 shares of common stock outstanding, to be paid on January 5, 2018.
(f) During the year, customer advances of 5160,000 were received; 550,000 of this amount was earned by December 31, 2017.
Instructions - For each item above, indicate the dollar amount to be reported as a current liability. If a liability is not reported, explain why.
Problem 4 -
On 1/1/2011, ABC Company purchased a piece of equipment costing $60,000. The equipment is expected to have a useful life equal to 4 years and a salvage value equal to $10,000.
What is the depreciation expense for each for the following years under
i) straight-line depreciation method
ii) double-declining balance method
ii) sum-of-years'-digits' method?
Attachment:- Assignment.rar