Can someone help me with this accounting problem?? prepare a balance sheet?
the following info (listed in random order) is available for a company at dec. 31 2008: uncollectible account expense 12000 income taxes payable(current) 36625 patents 58500 cash surrender value of life insurance policies 10800 accounts receivable 102000-net of credit balances of 10000 arising "from advance payments by customers" 92000 sales 450000 allowance for doubtful accounts 5800 cash on hand 44825 cash in bank 26000 short-term prepayments of expenses 3500 dividends received as revenue 4500 R/E-ending 12/31/08 (adjusted) 232800 current installment of long-term debt 20000 7% long-term not payable(only long term portion) 230000 accounts payable 220000 inventories 332600 marketable securities 58500 depreciation expense 19900 building and equipment 400000 accumulated depre 109600 paid-in capital in excess of par 155200 capital stock $2 100000 shares authorized 60000 long-term advance to affiliated company 50000 error in inventory pricing in 05 12500 discontinued operational loss 42000
2007-10-14T21:36:09Z
sales returns and allowances 3100
I have been trying this problem the whole day. i don't know where some accounts belong to so please help me with this problem. thank you
Sandy2007-10-15T21:03:26Z
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Balance Sheet as at Dec 31, 2008
Non-current assets Patents 58,500 Loan to affiliate 50,000 Building & equipment (nbv) 290,400 Sub-total 398,900
Current assets Inventories 332,600 Cash surrender value 10,800 Marketable securities (at mkt value) 51,800 A/cs receivable (net) 86,200 Prepaid exp. 3,500 Bank 26,000 Cash 44,825 Sub-total 555,725
Current liabilities A/cs payable 220,000 Current portion of L-T debt 20,000 Income tax payable 36,625 Sub-total 276,625
Total Liabilities 506,625
Equity Common stock 60,000 Paid-in capital in excess of par 155,200 Retained earnings 232,800 Sub-total 448,000
Total Liabilities & Equity 954,625
Note : FASB Technical Bulletin No. 85-4 requires that the amount that could be realized under the insurance contract as of the date of the statement of financial position should be reported as an asset. But stay alert to changes as this treatment is being looked at now. Also, marketable securities should be stated at the lower of cost and market. In this case, mkt is lower so we use mkt and not cost. This was the info you gave me separately.
If you dont know that an item called depreciation expense is an income statement item, whereas accumulated depreciation is a balance sheet item..then you need a tutor..not someone to answer this question on the internet.
I will give you a hint..
Short term assets:
cash on hand cash in bank
Marketable securities
accounts receivable (Less: allowance for doubtful accounts) this is a contra asset
short term prepayments of expenses (called prepaid assets)
Inventories
Total Short term assets:_____________
Long term assets Long term advance receivable from affiliated compnay
Fixed Assets: Building and equipment Less:(accumulated depreciation) this is a contra asset
Total Fixed assets ___________________
Intangible Assets
Patents
note I'm not sure if the cash surrender value is actually classifed as an asset
Liabilities
Short term liabilities accounts payable income taxes payable current instalment of long term debt payable
Long term Liabilities 7% note payable long term portion
Total Liabilities __________________
EQUITY
capital stock par $2 $100,000 (60,000 shares aut) paid in capital in excess of par Retained Earnings (R/E)
Income statement items that will not show on the balance sheet are discontinued operatiional loss, error in inventory pricing, depreciation expense, dividends received as revenue, sales, and uncollectible account expense.
The two items I am not 100% sure about are the cash surrender value of insurance policy..I can't recall if this is listed as an intangible or not..maybe look this up.
Also, the wording of the accounts receivable net of the credit balances is throwing me off a little bit because its like 2 AM where I am
If you fill in my template..you will get an A+ for sure :)
Allowance for doubtful accounts and accumulated depreciation are "contra asset" accounts and are subtracted from the balance sheet assets. The corresponding Expense items are Uncollecitible Account EXPENSE and Depreciation EXPENSE and these appear on the INCOME statment
in the equity section dont let the wording confuse you..you know the par per share is $2..and the value is 100,000 . The fact that they are saying 60,000 authorized is irrelevant. in calculating the amount. You just know that 50,000 were issued at a par value of $2=100,000
So what is the "paid in capital in excess of par"...well this just means that when the company actually SOLD the shares..they sold them for more than $2... so the origianl jornal entry for share sales would have been
D)CASH 100,000+155,200 cr )paid in capital in excess of par 155,200 cr )par $2 shares, 50000 issued, 60000 auth $100000