The adjusted trial balance of Eastwood Company and other related information for the year 2012 are presented on the next page.
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EASTWOOD COMPANY
ADJUSTED TRIAL BALANCE
DECEMBER 31, 2012
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Debits
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Credits
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Cash
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$ 41,000
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Accounts Receivable
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163,500
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Allowance for Doubtful Accounts
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$ 8,700
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Prepaid Insurance
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5,900
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Inventory
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208,500
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Equity Investments (long-term)
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339,000
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Land
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85,000
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Construction in Process (building)
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124,000
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Patents
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36,000
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Equipment
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400,000
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Accumulated Depreciation-Equipment
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240,000
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Discount on Bonds Payable
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20,000
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Accounts Payable
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148,000
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Accrued Expenses
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49,200
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Notes Payable
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94,000
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Bonds Payable
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200,000
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Common Stock
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500,000
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Paid-in Capital in Excess of Par-Common Stock
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45,000
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Retained Earnings
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138,000
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$1,422,900
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$1,422,900
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Additional information:
1. The LIFO method of inventory value is used.
2. The cost and fair value of the long-term investments that consist of stocks and bonds is the same.
3. The amount of the Construction in Progress account represents the costs expended to date on a building in the process of construction. (The company rents factory space at the present time.) The land on which the building is being constructed cost $85,000, as shown in the trial balance.
4. The patents were purchased by the company at a cost of $40,000 and are being amortized on a straight-line basis.
5. Of the discount on bonds payable, $2,000 will be amortized in 2013.
6. The notes payable represent bank loans that are secured by long-term investments carried at $120,000.
These bank loans are due in 2013.
7. The bonds payable bear interest at 8% payable every December 31, and are due January 1, 2023.
8. 600,000 shares of common stock of a par value of $1 were authorized, of which 500,000 shares were issued and outstanding.
Instructions
Prepare a balance sheet as of December 31, 2012, so that all important information is fully disclosed.