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Balance Sheet

Please see the attached file.

I need to really understand this balance sheet because I'm going to take a text. Can you
please explain to me more clearly how the additional information was used to create the
Balance Sheet? Are 8 additional points, can you use different colors for each explanation point

Balance Sheet
31-Dec-07
Assets
Current assets
Cash 41,000
Accounts receivable 163,500
Less: Allowance for doubtful
accounts 8,700 154,800
Inventory?at LIFO cost 308,500
Prepaid insurance 5,900
Total current assets 510,200

Long-term investments
Investments in stocks and bonds,
of which investments of $120,000
have been pledged as security for
notes payable?at fair value 339,000

Property, plant, and equipment
Cost of uncompleted plant facilities
Land 85,000
Building in process of
construction 124,000 209,000
Equipment 400,000
Less: Accum. depreciation 140,000 260,000 469,000

Intangible assets
Patents?at cost less amortization 36,000
Total assets 1,354,200

Liabilities and Stockholders' Equity
Current liabilities
Notes payable, secured by
investments of $120,000 94,000
Accounts payable 148,000
Accrued expenses 49,200
Total current liabilities 291,200

Long-term liabilities
8% bonds payable, due
January 1, 2018 400,000
Less: Unamortized discount on
bonds payable 20,000 380,000
Total liabilities 671,200

Stockholders' equity
Common stock
Authorized 600,000 shares of $1
par value; issued and
outstanding, 500,000 shares 500,000
Premium on common stock 45,000 545,000
Retained earnings 138,000 683,000
Total liabilities and
stockholders' equity 1,354,200

Attachments

Solution Preview

Please see the attached file. I have tried to explain the difference between the balance sheet made from the trial balance and the balance sheet after additional information is given.

The additional information is used to provide more details in the balance sheet so that users understand the figures better.

We first create the balance sheet based on the trial balance above. Later on we will
use the 8 points to add additional information

If no additional information is there, the balance sheet looks as below

Balance Sheet
31-Dec-07
Assets
Current assets
Cash 41,000
Accounts receivable 163,500
Less: Allowance for doubtful
accounts 8,700 154,800
Inventory 308,500
Prepaid insurance 5,900
Total current assets 510,200

Long-term investments 339,000

Property, plant, and equipment

Land 85,000
Contruction work in
progress 124,000 209,000
Equipment 400,000
Less: Accum. depreciation 140,000 260,000 469,000

Intangible assets
Patents?at cost less amortization 36,000
...

Solution Summary

The solution explains what additional information should be added to the balance sheet to make it complete

$2.19