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The following is an alphabetical listing of Stone Boat Company's balance sheet amounts and account balances on December 31, 2016.
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Accounts Payable
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44,200.00
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Income tax payable
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19,700.00
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Accounts Receivable
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37,100.00
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Inventory
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85,300.00
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Accumulated Depreciation
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109,300.00
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Investment in Affiliate
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30,000.00
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Additional paid-in capital on common stock
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20,000.00
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Long-Term liabilities (book value)
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91,000.00
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Additional paid-in capital on preferred stock
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3,200.00
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Miscellaneous current payables
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6,800.00
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Allowance for doubtful accounts
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1,600.00
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Notes receivable
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1,700.00
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Bank sinking fund
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12,500.00
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Preferred stock
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32,000.00
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Cash
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13,800.00
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Property, Plant and equipment
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296,700.00
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Common stock
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80,000.00
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Retained earnings
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84,600.00
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Additional information
1. The company reports on the balance sheet the net book value of propert and equipment and long term liabilties (known as control accounts). The related details are disclosed in the notes.
2. The straight line method is used to depreciate property and equipment based upon cost, estimated residual value, and estimated life. The costs of the assets in this account are land, 29500; buildings. 164600; store fixtures, 72600; and office equipment 30000.
3. The accumulated depreciation breakdown is as follows: building 54600; store fixtures, 37400; and office equipment 17300
4. The long term debt includes 12% 36000 face vaule bonds that mature on December 31, 202, and have an unamoritized ond discount of 1000; 11%; 48000 face value bonds that mature on December 31, 2022, have a preimpum on bods payable of 1800 and ehose retirement is being funded by a bond sinknig fund; and a 13% note payable that has a face value of 6200 and matures on January 1, 2019
5. The non-interest bearing note receivable matures on June 1, 2020
6. Inventory is listed at lower cost or market; cost is determined on a basis of average cost
7. The investement in affiliate is carried at cost. The compan has guranteed the interest on 12% 50000 15 year bonds issued by this affilate, Jay Compay
8. Common stock has a 10 par value per share, 10000 shares are authorized and 1000 shares were issued during 2016 at a price of 13 per share, resulting in 8000 shares issued at year end
9. Preferred stock has a 50 par value share, 2000 shares are authorized and 140 shares were issued during 2016 at a price of 55 per share 2000 shares are authorized and 640 shares issued at year end
10. On January 15, 2017 before december 31, 2016 balance sheet was issued a building with a cost of 20000 and a book value of 7000 was tottal destroyed. Insurance proceeds will amount to only 5000
11.Net income and dividends declared and paid during the year were 50500 and 21000 respectively.
1. Prepare Stone Boats December 31, 2016 balance sheet (including appropriate parenthetical notations)
2. Preapre a statement of shareholders equity for 2016 (hint work back from the ending account balances
3. Prepare notes that itemize the balance sheet control accounts and those necessary to disclose any company accounting policies, contingent liabilities and subsequent events.
4. Next Level: Compute the debt-to-assets ratio at the end of 2016. What is your evaluation of this ratio if it was 39% at the end of 2015?