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Balance Sheet

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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

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https://brainmass.com/economics/bonds/balance-sheet-192848

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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
See Also This Related BrainMass Solution

On January 1, DEF Company purchased all outstanding common shares of UVW Corporation at book value.

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The 4 Questions relate to the following information:

On January 1, DEF Company purchased all outstanding common shares of UVW Corporation at book value. DEF used the basic equity method to account for its investment in UVW. The investment account is carried at the book value of UVW's net assets and is adjusted for DEF's share of UVW's earnings and dividends. DEF owed UVW $2,000 on account at the end of the year. UVW purchased $8,000 of inventory from DEF during the year. The inventory originally cost DEF $5,000. UVW still holds 50 percent of the inventory at the end of the year.

* DEF reports net Receivables of $85,000 on its balance sheet at the end of the year, and UVW reports net Receivables of $40,000 on its balance sheet at the end of the year. What is the amount of net Receivables to be reported on the consolidated balance sheet for DEF Company and Subsidiary as of the end of the year?
a. $125,000
b. $85,000
c. $40,000
d. $123,000
e. None of the above

* DEF reports Short-term Payables of $65,000 and UVW reports Short-term Payables of $10,000 as of the end of the year. What is the amount of Short-term Payables to be reported on the consolidated balance sheet for DEF Company and Subsidiary as of the end of the year?
a. $75,000
b. $65,000
c. $10,000
d. $77,000
e. None of the above

* DEF reports Retained Earnings of $130,000 as of the end of the year, and UVW reports $90,000. What is the amount of Retained Earnings to be reported on the consolidated balance sheet for DEF Company and Subsidiary as of the end of the year?
a. $128,500
b. $130,000
c. $220,000
d. $218,500
e. None of the Above

* DEF reports Common Stock of $700,000 on its balance sheet as of the end of the year, and UVW reports Common Stock of $300,000. What is the amount of Common Stock to be reported on the consolidated balance sheet for DEF Company and Subsidiary as of the end of the year?
a. $1,000,000
b. $300,000
c. $700,000
d. $0
e. None of the Above

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