Explore BrainMass

Explore BrainMass

    how do you value PPE, bonds, AR, inventory and AP

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    1-When a company cannot justify applying the going concern assumption, different measurement attributes may be required. Identify the most likely measurement.

    1. Plant and equipment would be valued at _______________________________________________

    2. Bonds Payable would be valued at ________________________________________________.

    3. Accounts receivable should be valued at ____________________________________________

    4. Inventory should be valued at ____ market / cost _______________________ .A LIFO inventory in an inflationary economy forced sale may result in an increase in inventory values rather than a decrease. Yes / No
    5. Accounts Payable would be valued at ________________.______________________________
    .2. MARK WITH AN ( x ) THE ACTION YOU WOULD TAKE WHEN YOU ARE CLOSING THE BOOKS
    Balance Balance Balance
    Carried Closed by Closed by
    Account Forward Debiting Crediting
    This account This account

    (a) Cash ___________________________________
    (b) Sales ___________________________________
    (c) Dividends ___________________________________
    (d) Inventory ___________________________________
    (e) Selling Expenses ___________________________________
    (f) Capital Stock ___________________________________
    (g) Wages Expense ___________________________________
    (h) Dividends Payable ___________________________________
    (i) Cost of Goods Sold ___________________________________
    (j) Accounts Payable ___________________________________
    (k) Accounts Receivable ___________________________________
    (l) Prepaid Insurance ___________________________________
    (m) Interest Receivable ___________________________________
    (n) Sales Discounts ___________________________________
    (o) Interest Revenue ___________________________________
    (p) Supplies ___________________________________
    (q) Retained Earnings ___________________________________
    (r) Accumulated Depreciation ___________________________________
    (s) Depreciation Expense ___________________________________

    3. Closing Entries--- Close the following accounts using the Summary of Income and Expenses
    Sales ������������75,000
    Selling Expense 7,900
    Wages Expense 14,400
    Cost of Goods Sold 26,500
    Vacation Expense��������������..4,000
    Sales Discounts 4,200
    Interest Revenue 6,500
    Depreciation Expense 1,800

    4Prepare the post closing entries to correct the balances in Balance Sheet below�

    Balance Sheet
    December 31, 2011
    Assets Liabilities
    Current assets: Current liabilities:
    Cash $ 8,500 Accounts payable $ 3,400
    Investment securities 5,250 Current portion of bonds
    Accounts receivable, net 21,350 payable 2,500
    Inventory 31,000 Loan due on demand 7,000
    Land held for resale 8,000 Dividends payable 15,000
    Other current assets 10,200 Other 2,000
    Total current assets $ 84,300 Total current liabilities $ 29,900
    Long-term liabilities:
    Noncurrent assets: Bonds payable $ 7,500
    Investments $ 2,750 Other liabilities 15,750
    Property, plant, and Total long-term
    equipment, net 56,800 liabilities $ 23,250
    Restricted cash: Total liabilities $ 53,150
    For preferred stock 19,000 Ownersâ?? Equity
    For equipment 4,000 Preferred stock $ 19,000
    Advance to company Common stock 50,000
    president 4,000 Retained earnings 66,800
    Other noncurrent assets 13,600 Less treasury stock (4,500)
    Total noncurrent Total ownersâ?? equity $ 131,300
    assets $ 100,150 Total liabilities and ownersâ??
    Total assets $ 184,450 equity $ 184,450

    1. The advance to company president has been declared a bonus by the Board.
    2. The Treasury Stock had been sold for $4,500 in cash and Retained Earnings had been credited.
    3. One third of the bonds payable are due next year.
    4. Land originally held for resale it is going to be used to build a cottage for Research and Development.
    5. Dividends payable had been paid and the following entry had been originally made:
    Restricted cash for Preferred Stock $15,000
    Cash $15,000

    4. In the case above, prepare the Owners Equity section after the sale of Treasury Stock. You noticed that the correct stock accounts are as follows
    Common stock at par $10,000
    Preferred stock at par $10,000
    Paid in Capital, Common stock in excess of par $40,000
    Paid in Capital, Preferred stock in excess of par $9,000

    â??
    5-Prepare ADJUSTING ENTRIES as of 12/31/10

    1 The Depreciation Expense for the year was $1, 500
    2. An estimate of $400 of Accounts receivable are considered bad debts
    3. A note you signed pays 6% interest and it is dated Oct. 1 with a face value of $2,000
    4. The rent was prepaid as of August 1 for one year at a cost of $36,000.
    5. Unearned Gym membership was recorded in November for $ 4,800 and in December for $3,600. All memberships are for one year.

    © BrainMass Inc. brainmass.com June 4, 2020, 12:31 am ad1c9bdddf
    https://brainmass.com/business/inventory/value-ppe-bonds-ar-inventory-ap-343871

    Solution Summary

    The expert determines how we value PPE, bonds, AR, inventory and AP.

    $2.19

    ADVERTISEMENT